Equity Bank Kenya has lowered its lending reference rate for loans taken in Kenya. This follows the readjustment of the Central Bank Rate (CBR).

The CBR has decreased from 13 per cent to 12.75 per cent.

In a statement to customers, Equity Bank Kenya announced that its lending reference rate had reduced from 18.24 per cent to 17.83 per cent.

A margin that is set at a maximum of 8.5 per cent shall then be added onto this lending reference rate.

The new lending rates will come into effect from September 9, 2024.

“Following the adjustment of the Central Bank Rate (CBR) on 6th August 2024 from 13 per cent to 12.75 per cent, we wish to inform our customers and the general public that we have reduced Equity Bank’s Reference Rate (EBRR) from the current 18.24 per cent to 17.83 per cent effective 9th September 2024,” the bank announced.

“Consequently, the final interest rate shall be Equity Bank’s Reference Rate (17.83 per cent) plus a margin (currently at a maximum of 8.5 per cent) per annum.”

According to the bank, the new lending rates will apply to all new Kenya shilling-denominated credit facilities.

“We will continue to monitor the market and advise accordingly in case of further changes,” the bank stated.

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Section 36 (4) of the Central Bank of Kenya (CBK) Act mandates that the CBK shall publish the lowest rate of interest it charges on loans to banks and that rate shall be known as the CBR.

According to the CBK, the level of the CBR is reviewed and announced by the Monetary Policy Committee (MPC) at least every two months and its movements, both in direction and magnitude, signals the monetary policy stance.

“The CBR is the base for all monetary policy operations in order to enhance clarity and certainty in monetary policy implementation,” the CBK states.