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Equity Bank has followed suit with other financial institutions by reducing its lending rates.
The bank has announced a 300 basis point (3 percent) cut in interest rates for both new and existing loans denominated in Kenyan Shillings.
Effective from February 13, 2025, for new loans and March 1, 2025, for existing loans, this reduction aligns with the Central Bank of Kenya’s decision to lower the Central Bank Rate (CBR) by 50 basis points to 10.75 percent.
This marks the third time in six months that Equity Bank has reduced its lending rates, with previous cuts occurring in September and November 2024.
The bank’s new Equity Bank Reference Rate (EBRR) is now 14.39 percent, with an additional margin based on individual customers’ risk profiles.
Moses Nyabanda, the Managing Director, emphasized that the decision is aimed at alleviating financial pressure on businesses and households. He noted, “We understand the financial challenges Kenyans are facing today, and we are dedicated to easing that burden.”
Nyabanda also added, “This rate reduction is not just about lowering interest rates; it’s about creating opportunities for Kenyans to invest in their businesses, support their families, and sustain their livelihoods.”
Equity Bank believes the move will have a positive effect on the Kenyan economy by increasing access to affordable credit.
Equity joins other lenders such as Kenya Commercial Bank (KCB) and Co-operative Bank, who have also reduced their base lending rates in compliance with the Central Bank of Kenya’s directive.
This trend is expected to continue across the banking sector.
Simultaneously, the CBK has lowered the Cash Reserve Ratio (CRR) for banks to 3.25 percent, which is anticipated to unlock up to Sh57 billion for lending. This change follows a series of rate cuts in late 2024, aimed at stimulating economic growth after a period of slowdown.
