Forecast: Bank Nonperforming Loans to Total Gross Loans in Kenya

The ratio of bank nonperforming loans to total gross loans in Kenya has shown a significant rise from 5.04% in 2013 to 11.22% in 2023. Over the past decade, there was a sharp increase from 2015 to 2018, peaking at 12.03% in 2018. From 2019 onwards, the rate fluctuated slightly but remained relatively high, closing at 11.22% in 2023. Year-on-year variations from 2022 to 2023 saw a 0.99% increase, while 2021 to 2022 experienced a marginal 2.02% rise. The compound annual growth rate (CAGR) from 2019 to 2023 was relatively stable at -0.17%.

Looking forward, the forecast data from 2024 to 2028 indicate a slight downward trend in the ratio, projecting a modest decline to 11.09% by 2028. The forecasted 5-year growth rate from 2024 to 2028 predicts a decrease of 0.84%, suggesting a relatively stable but decreasing trend.

Future trends to watch for:

• Macroeconomic conditions and their impact on loan performance.
• Regulatory changes affecting the banking sector.
• Efficiencies in loan recovery processes and credit risk management.
• Potential shifts in the political landscape influencing economic stability.