KCB Bank Kenya Limited has issued a public notice on the implementation of the revised Risk-Based Credit Pricing Model for existing facilities.
In a notice on January 28, KCB addressed Kenya Shilling-denominated local currency variable-rate loans and outlined how the revised framework will apply to customers with running loan contracts issued on or before November 30, 2025.
“From December 1, 2025, KCB Bank Kenya adopted the new Risk-Based Credit Pricing Model (RBCPM) for Kenya Shilling (Kes) denominated local currency variable-rate loans in line with Central Bank of Kenya’s (CBK) circular, for new facilities,” the notice read in part.
According to the notice, the model applies to a common reference rate, the Central Bank Rate, plus a customer-specific risk premium to determine lending rates, and further specifies the total additional costs attributable to the issuance of a new facility.
The bank has now notified all customers with active local currency loan contracts issued on or before November 30, 2025, that the new Risk-Based Credit Pricing Model will apply to any outstanding portion of their facilities as of February 28, 2026.
KCB Implementation of Revised Risk-Based Credit Pricing Model for Existing Facilities
Under the revised model, the Central Bank Rate serves as the reference rate, with a customer-specific risk premium reflecting risk associated with the customer’s evaluation at the time of the loan application.
The model also provides for disclosure of fees as approved by the Central Bank of Kenya.
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Additionally, KCB noted that from March 1, 2026, variable-rate facilities denominated in Kenya Shillings will be priced as the Central Bank Rate plus the applicable premium. The premium reflects the risk attributable to the customer’s evaluation at the time of the loan application, in addition to fees approved by the Central Bank of Kenya.
“Variable-rate facilities (Kes-denominated) will be priced as CBR + Premium (K), with the Premium reflecting risk attributable to evaluation of the customer at the time of loan application.”
The notice further explained that the total cost of credit is defined under the revised model. The Total Cost of Credit equals the Central Bank Rate plus the priced premium, together with fees.
These charges include origination fees, insurance, negotiation, commitment fees, and any applicable additional costs as published on December 1, 2025.
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Application to Existing Customers and Disclosure Requirements
The Bank clarified that existing customers will not be subject to the fees and charges under the revised Risk-Based Credit Pricing Model.
The notice states that these fees shall apply only to new facilities and will not apply to customers with active loan contracts issued on or before November 30, 2025.
“Existing customers will not be subjected to the fee components in the revised RBCPM; these fees shall only apply to new facilities.”
The bank also emphasised transparency requirements under the Central Bank of Kenya framework. Customers will receive full disclosure of the total cost of credit in line with the Central Bank of Kenya Transparency requirements.
“The Total Cost of Credit will be fully disclosed to customers in line with the CBK Transparency requirements.”
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