Major commercial banks in Kenya have reduced their lending rates in response to the Central Bank's decision to lower the Central Bank Rate from 9.00% to 8.75%.
In a recent move, leading commercial banks in Kenya have announced a reduction in their base lending rates after the Central Bank of Kenya (CBK) cut the Central Bank Rate from 9.00% to 8.75%. This decision was made during the Monetary Policy Committee meeting on February 10, which marks the tenth consecutive rate decrease aimed at stimulating credit growth and easing borrowing costs for consumers and businesses alike.
The adjustments by key lenders such as KCB Bank Kenya, Equity Bank Kenya, NCBA Bank Kenya, and Family Bank Kenya reflect the new 8.75% benchmark established under the Risk-Based Credit Pricing Model. Starting from mid-February, new variable-rate loans will be priced at the new base rate plus an individual customer risk margin, while existing variable-rate loans will see their rates adjusted following a 30-day notice period. Furthermore, banks will transition older loans to the revised pricing framework before March 2026.
This strategic move comes as inflation in the country eases to 4.4%, signaling a potential environment conducive to increased lending and investment. The reduction in lending rates may also encourage consumer spending and economic growth, positioning the financial sector to play a crucial role in supporting the recovery of the Kenyan economy post-pandemic.
