KCB to buy Sh3b City Hall loan

By MACHARIA KAMAU

The Kenya Commercial Bank (KCB) stands to benefit following a fall-out between the Nairobi County Government and Equity Bank.

KCB will take over a loan facility that Equity Bank had advanced to the county government in 2011 – whose outstanding balance is Sh3.34 billion.

KCB will also top up the loan to City Hall by Sh700 million, bringing the loan amount to Sh4 billion, and has also been handed a revenue collection deal by the county government as part of the deal to take over the loan from Equity.

The bank had advanced Sh5 billion loan to the City Council of Nairobi, predecessor to the county government, for what City Hall said was to pay outstanding creditors.

The loan has, however, been termed as having unfriendly terms as well as a high interest rate, initially at 10 per cent but has risen to 18.5 per cent due to frequent revision of interest rates by banks.