Commercial bank lending rates in Kenya have continued to stabilize in January 2026, following sustained monetary easing by the Central Bank of Kenya (CBK) and adjustments by lenders in line with risk-based pricing models.
The CBK has maintained the Central Bank Rate (CBR) at 12.00 per cent, a level in place since the final quarter of 2025.
Banks Ease Lending Rates
According to the latest CBK data, the average commercial bank lending rate stood at 14.82 per cent in December 2025, down slightly from 14.88 per cent recorded in October.
Data published by the CBK covering all 38 licensed commercial banks shows a wide variation in lending rates across institutions, largely driven by differences in funding costs, customer risk profiles, and loan types.
| Commercial Bank | Lending Interest Rate (%) | Deposit Interest Rate (%) |
| Citibank N.A Kenya | 10.17 | 5.75 |
| Stanbic Bank Kenya Limited | 11.80 | 6.71 |
| Standard Chartered Bank Kenya Limited | 12.69 | 3.12 |
| Ecobank Kenya Limited | 12.77 | 7.43 |
| Habib Bank A.G Zurich | 13.41 | 6.63 |
| Guardian Bank Limited | 13.52 | 7.28 |
| ABSA Bank Kenya PLC | 13.75 | 7.35 |
| Consolidated Bank of Kenya Limited | 14.00 | 6.93 |
| Bank of Baroda (Kenya) Limited | 14.04 | 7.73 |
| Gulf African Bank Limited | 14.31 | 7.22 |
| Prime Bank Limited | 14.41 | 8.60 |
| Paramount Bank Limited | 14.52 | 9.54 |
| Bank of India | 14.53 | 7.85 |
| Victoria Commercial Bank PLC | 14.54 | 8.57 |
| Diamond Trust Bank Kenya Limited | 14.56 | 7.46 |
| Guaranty Trust Bank (K) Ltd | 14.76 | 7.51 |
| I&M Bank Limited | 14.77 | 7.52 |
| Premier Bank Kenya Limited | 14.84 | 5.23 |
| Equity Bank Kenya Limited | 14.96 | 6.93 |
| M-Oriental Bank Limited | 15.00 | 8.44 |
| KCB Bank Kenya Limited | 15.24 | 6.38 |
| NCBA Bank Kenya PLC | 15.54 | 5.36 |
| Co-operative Bank of Kenya Limited | 15.54 | 5.98 |
| Commercial International Bank (CIB) Kenya Limited | 15.70 | 8.20 |
| National Bank of Kenya Limited | 15.70 | 7.01 |
| African Banking Corporation Limited | 15.78 | 11.65 |
| UBA Kenya Bank Limited | 15.87 | 7.46 |
| Family Bank Limited | 16.00 | 8.55 |
| Kingdom Bank Limited | 16.12 | 9.53 |
| DIB Bank Kenya Limited | 16.54 | 6.81 |
| Development Bank of Kenya Limited | 16.62 | 9.93 |
| Middle East Bank (K) Limited | 17.07 | 9.47 |
| Sidian Bank Limited | 17.26 | 8.36 |
| SBM Bank Kenya Limited | 17.75 | 8.93 |
| HFC Limited | 17.94 | 5.67 |
| Bank of Africa Kenya Limited | 18.39 | 8.04 |
| Credit Bank PLC | 18.87 | 11.34 |
| Access Bank (Kenya) PLC | 19.55 | 7.78 |
| OVERALL INTEREST RATE | 14.82 | 7.13 |
New Loan Pricing Formula, KESONIA
Commercial banks in Kenya are now pricing variable‑rate loans using a new benchmark‑based formula centred on KESONIA, following CBK’s reforms.
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KESONIA stands for Kenya Shilling Overnight Interbank Average.
It is a transaction‑based reference rate that reflects the average interest rate at which commercial banks lend to each other overnight in Kenyan shillings.
The rate is calculated from actual interbank transactions and published daily by the CBK.
Under the CBK’s risk‑based credit pricing model, the lending interest rate for variable‑rate loans is now calculated as:
Lending Rate = KESONIA + Risk Premium (K)
Where:
- KESONIA is the benchmark reference rate
- Risk Premium (K) covers borrower credit risk, bank funding costs, operating and compliance costs, and return to shareholders.
To arrive at the Total Cost of Credit (TCC) disclosed to borrowers, banks then add applicable fees and charges:
Total Cost of Credit = KESONIA + K + Fees and Charges
Loans Covered by the KESONIA Framework
As of January 2026, CBK has held the CBR at 12.00 per cent, but lending rates continue to adjust as banks price loans using KESONIA‑linked formulas rather than relying solely on the policy rate.
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This has led to faster transmission of policy signals, greater differentiation in rates across banks, and greater disclosure of how loans are priced.
According to CBK directives, KESONIA applies to all new variable‑rate Kenya‑shilling loans from September 1, 2025.
It also applies to existing variable‑rate loans, which must transition fully by February 2026.
However, KESONIA does not apply to fixed-rate loans and foreign-currency-denominated loans.
The Central Bank of Kenya eased its monetary stance and influenced lower bank lending rates after inflation declined sharply and remained within the 3–7 per cent target range, reducing the need for restrictive policy.
At the same time, economic growth slowed, and private‑sector credit uptake weakened, signalling that high borrowing costs were constraining business activity and household spending.
Improved exchange‑rate stability and adequate foreign‑exchange reserves reduced the risks associated with easing.
The CBK also complemented the policy rate cut by introducing risk‑based credit pricing and the KESONIA benchmark to strengthen the transmission of monetary policy into actual lending rates charged by banks.
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