Several banks in Kenya have complied with the Central Bank of Kenya (CBK) directive to lower lending rates to ease borrowing costs.
This is after CBK announced a 0.5 percent reduction in its base lending rate to 10.75 with the low rate expected to be replicated across the banking sector.
The move, aimed at stimulating economic growth and easing borrowing costs, is expected to benefit businesses and individual borrowers.
Some of the banks that have so far complied are:
- Co-operative Bank
The fourth largest bank by asset base lowered its lending rate by 2 percent from 16.5 percent to 14.5 percent.
“We have reduced our Base Lending Rate from 16.5% to 14.5% per year – effective immediately! The final interest rate will be 14.5% + a small margin (0% to 4%), depending on your credit profile,” said Co-op Bank in a statement.
- Kenya Commercial Bank (KCB)
KCB Bank reduced its lending rate from 15.6 percent to 14.6 percent, effective February 10, 2025.
The bank emphasized that the final lending rate for customers will vary based on individual risk assessments and will be adjusted using the approved Risk-Based Credit Pricing Model.
“The final lending rate is based on a customer-specific margin, adjusted to the base rate, in line with the approved Risk-Based Credit Pricing Model,” KCB said in an official statement. “This applies to all existing and new Kenya shilling-denominated facilities and excludes fixed-rate credit facilities.”
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- Equity Bank
The lender announced a 3 percent reduction in interest rates on all new and existing Kenya Shilling-denominated credit facilities, effective February 13th, 2025 for new loans and from 1st of March for existing loans.
“The reduced interest rates will comprise a revised Equity Bank Reference Rate (EBRR) of 14.39% plus a margin (based on specific customer risk profile). This 300 basis points (3%) reduction applies to a wide range of credit products, reflecting the bank’s commitment to supporting customers across diverse sectors,” it stated.
- NCBA Bank Kenya
NCBA has lowered its Base Lending Rate to 15.34 percent per annum, with the new rates taking effect from February 16, 2025.
- I&M Bank
I&M Bank has announced a 2 percent cut in its lending rates, effective March 1, 2025, in response to CBK’s directive.
- M-Oriental Bank
M-Oriental Bank announced a reduction in its interest rates by 0.5 percent from 16.5 percent to 16.0 percent effective March 1, 2025.
“Following the recent decision by Central Bank of Kenya’s Monetary Policy Committee (MPC) on 5th February 2025 to cut Central Bank Rate (CBR) from 11.25% to 10.75% reflecting the improving economic conditions and easing inflation, we wish to advise our customers that we shall adjust our base lending rate downwards from currently 16.5% per annum to 16.0% with effect from 1st March 2025,” the lender announced.
The bank said this will apply to all existing and new Kenya Shilling denominated credit facilities.
- Absa Bank Kenya
Absa Bank Kenya has lowered its Base Lending Rate to 10.75 percent p.a. after a 100 bps cut, effective immediately for new loans and from 13th March 2025 for existing loans.
The Absa Base Rate (ABR) was also reduced by 300 bps to 13.5 percent in January.
