Standard Chartered Bank Kenya has introduced a secured overdraft facility that allows investors to borrow against government bonds held in the Central Bank of Kenya’s (CBK) Dhow Central Securities Depository (DhowCSD), according to Capital Business.
The product enables clients to access liquidity without selling their bonds and continue receiving coupon payments.
The loans are structured as overdraft advances, with minimum amounts starting at KES50,000 ($387.06) and maximum limits based on the value of each customer’s bond portfolio. Standard Chartered said interest rates are set on a secured-lending basis and that the facility does not include arrangement fees.
Edith Chumba, Standard Chartered’s Head of Wealth and Retail Banking for Kenya and East Africa, said the bank saw an opportunity to expand lending options for individuals who have directly invested in government securities through DhowCSD, according to Capital Business. She said the facility is intended to provide liquidity while maintaining long-term investment positions.
The launch comes as retail participation in Kenya’s government securities market has grown significantly following the rollout of DhowCSD.
According to the CBK, non-institutional holdings rose from 7% in June 2023 to 13% in June 2024, and active DhowCSD accounts more than doubled from around 45,000 to more than 96,000 over the same period. The increase has been linked to the digitisation of government bond access and broader financial inclusion efforts.
Standard Chartered Bank Kenya is part of Standard Chartered PLC, which provides retail, corporate and wealth management services across East Africa.
The bank said a pilot phase of the bond-backed lending programme earlier this year recorded strong uptake among customers seeking flexible liquidity against long-term assets, KBC reported.
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