Nairobi, April 8 -- Commitment fees Kenya paid on untapped external loans hit Sh833.85 million in the six months to December 2023 driven by a weak shilling.

This places the cost of commitment fees in the financial year 2023/24 on course to surpass the Sh1.35 billion that was paid for the same in the entire 2022/23.

It is also more than the Sh680.3 million the government paid on the undisbursed loans in the corresponding period in the previous financial year.

The commitment fee is paid to compensate the lender for their commitment to lend. The fee is charged because the lender has set aside funds for the loan but cannot yet charge interest pending drawdown.

The fee is typically associated with unused credit lines or undisbursed loans a...