I would also like to signal a note of caution about the rapid build up of foreign currency lending by the banks, which stands in sharp contrast to the stagnation of Shilling denominated lending. The ratio of foreign currency denominated loans to total outstanding loans has risen sharply since mid 2011, from 25 percent to the current level of 38 percent.
Most of this increase is not attributable to the depreciation of the exchange rate which has occurred in the last few months because the dollar value of these loans has itself risen by 27 percent over the last 12 months and by over 60 percent in the last 18 months.