Nairobi, June 4 -- Kenya's top nine banks were holding collateral or security for loans worth a staggering Sh5.7 trillion in December, exposing borrowers to huge losses in case of default.

The nine listed banks, including KCB Group, Equity Holdings, Co-operative Bank and NCBA Group, have grown collateral sitting on their books from Sh5.1 trillion in 2024.

The collateral held by the banks, which is over a quarter of the Kenyan GDP, was 1.5 times the loans issued by the lenders at Sh3.6 trillion, underlining the banks' reliance on security to issue loans.

In global markets such as the United States, collateral held by banks is approximately 70 percent of their loan book, with most of the lending backed by cash flow, guarantees and credit...