Insider loans are loans that banks and financial institutions give to their employees, directors, managers, associates, shareholders etc. The loans are usual done under local arrangements by the bank Board of Governors.
Banks Giving Insider Loans in Kenya
Several banks in Kenya offer insider loans to their employees including:
KCB Bank
Equity Bank
Absa Bank
Co-op Bank
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Insider loans Interest rates
Insider loans interest rates are usual low compared to the loans giving to outsiders. The Central bank regulates interest rates for private lending ynot for insider loans. Insider loans interest rates are determined by the banks Board of Governors.
Non - Performing loans
One of the major cause of non-performing loans is Insider loans. If not well controlled insider loans can results to the downfall of a bank. Several banks in Kenya have been put under receiverships after insider loans turned to non-perfoming loans.
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