KENYA

Banks Win on Terms to Dictate Loan Costs in CBK’s U-Turn

The Central Bank of Kenya (CBK) has retreated from its plans to control lending rates using its benchmark rate, handing a victory to commercial lenders who preferred to use the interest charged on short-term loans between banks to determine borrowing costs. Official correspondence between the CBK and commercial banks reveals that the banking sector regulator has reversed its earlier proposal, abandoning the use of the Central Bank Rate (CBR) as the base for loan pricing. Instead, the market will now use the average interbank rate, fronted by the industry lobby, the Kenya Bankers Association (KBA), to determine consumer borrowing costs. “CBK proposes the use of the interbank rate as the common reference rate for determining lending rates for all customers. The total lending rate will be the interbank rate plus a premium (K),” the CBK said in a document dated July 20.

(Source: Business Daily)

TANZANIA

Tanzania’s Digital Payments Surge to TSh30 trillion

Tanzania’s transition to a digital economy marked a major milestone last year, with the Tanzania Instant Payment System (TIPS) processing nearly TSh30 trillion in transactions. The number indicates a sharp increase, highlighting the country’s growing reliance on real-time digital payments. The Bank of Tanzania’s 2024 Financial Stability Report reveals a significant rise in TIPS transactions, driven by the rapid adoption of digital financial services and enhanced interoperability among providers. 

(Source: The Citizen)

UGANDA

DFCU Bank Partners with Aurionpro to Champion Banking Transformation in Uganda

DFCU Bank has announced a strategic partnership with Aurionpro Solutions, an international fintech leader. This collaboration places DFCU Bank at the forefront of digital innovation, setting a new industry benchmark in transaction banking for Corporate and SME clients. The partnership will see DFCU Bank adopt Aurionpro’s next-generation digital banking platform. This comprehensive solution supports multi-channel access, seamless domestic and cross-border payments, and enhanced forex capabilities. The technology is designed to transform the way customers, especially SMEs, interact with their bank, enabling faster, safer, and more agile financial services. Speaking about the partnership, DFCU Bank CEO Charles M. Mudiwa revealed that the initiative reaffirms the bank’s commitment to innovation, inclusion, and growth.

(Source: The Independent)

RWANDA

Businesses welcome Rwanda-Tanzania Ports Agreement

Rwandan importers and freight forwarders have welcomed the formalisation of a bilateral agreement between Rwanda and Tanzania to operationalise the Tanzania Ports Authority (TPA) liaison office in Kigali. The Kigali office is expected to significantly enhance trade efficiency by facilitating cargo clearance locally, reducing reliance on physical processing at Tanzanian ports, particularly the Port of Dar es Salaam. The initiative is seen as a strategic move to cut logistics costs, minimise delays, and improve the overall ease of doing business between the two countries.

(Source: The New Times)

ETHIOPIA

Abyssinia Bank Launches Fully Paperless Banking Service

Abyssinia Bank has officially launched an entirely paperless banking service at its Ras Premium Branch. The new system was inaugurated on Saturday at a ceremony attended by key stakeholders, including Ato Mamo Mehret, Governor of the National Bank of Ethiopia, who praised the initiative as a promising step forward in enhancing financial services through technology. The paperless service is designed to offer customers fast and secure banking options. Clients can perform core banking activities such as transferring money, depositing and withdrawing cash, and opening accounts either independently or with assistance from bank staff. The system utilises biometric verification, including fingerprint and facial recognition, to enhance security and streamline time-consuming procedures.

(Source: 2 merkato)