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Top commercial banks have reduced their lending rates after the Central Bank of Kenya (CBK) lowered the Central Bank Rate (CBR) from 9.00% to 8.75% this week.
The Monetary Policy Committee announced the 25 basis point cut on February 10, marking the tenth consecutive reduction aimed at stimulating credit growth and making borrowing more affordable.
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In response, major lenders including KCB Bank Kenya, Equity Bank Kenya, NCBA Bank Kenya, and Family Bank Kenya have adjusted their Kenya shilling variable-rate loans to align with the new 8.75% benchmark under the Risk-Based Credit Pricing Model.
From mid-February, new variable-rate loans will be issued at the base rate plus a customer-specific risk margin. Existing variable-rate loans will be adjusted after a statutory 30-day notice period, while older loans are set to transition to the updated pricing framework by March 2026.
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The move comes as inflation slowed to 4.4% in January, giving the central bank leeway to maintain an accommodative monetary policy.
Analysts caution that while base rates have fallen, monthly repayments will still vary depending on individual risk profiles and loan terms.
