Banks cut credit to real estate as defaults hit Sh70b

Developers who had pegged their loan repayments on rental income or receipts from selling finished properties have seen their calculations complicated by the low uptake of units. [iStockphoto]

Commercial banks are slamming brakes on their lending to property developers to shield themselves from further defaults after unpaid loans crossed the Sh70 billion mark.

Central Bank of Kenya (CBK) data for January 2022 shows the pace of annualised credit growth to the real estate players slowed for the fourth straight month to hit 0.5 per cent, compared to 2.9 per cent in September last year and 8.8 per cent in January 2021.