UBA bank has been ranked the cheapest lender for Small and Medium Size Enterprises (SMEs) in the country's financial sector according to a new study by consulting firm Think Business Limited.

The Think Business banking tariff survey for 2017 released on Wednesday says UBA beat large commercial banks with least costs charged to its customers.

The findings of the survey were based on commercial banks' general tariff guides.

"In addition for the banks with the lowest charges UBA bank emerged as the overall lender with the lowest charges  in  SME banking for 2017 in both SME models," said Think Business chief executive Ochieng Oloo.

In the survey, Paramount Bank was ranked the second overall cheapest lender.

ABC and Credit Bank  tied  at  third  spot while Consolidated Bank and  Guardian Bank  tied  at  the fifth  position.

The  Think Business  tariff  survey covered retail banking and SME banking classes of business across 38  commercial banks.

Besides gleaning information from charges levied by banks as per their tariff guides, the survey based its findings on research carried out across six major counties between 27 January and 2 February this year and featured 1,093 respondents.

The research was conducted by Think Business in partnership with research firm Infotrak and Financial Sector Deepening (FSD) Kenya.

When  presented  based  on  tiers, Cooperative  Bank of Kenya and  Equity Bank were ranked as  the  banks  with  the  lowest  charges in  SME  banking  for  2017 in the tier 1  segment.

Among the tier 2 lenders, Housing Finance registered the lowest charges for  SME banking in 2017, while  ABC  bank from tier 3 and UBA from tier 4 had the lowest charges.

According to the survey, the industry’s annual average cost of banking has reduced from Sh12,935 in 2016 to Sh11,959 in 2017, a decrease of 8 per cent.