Kingdom Bank, a subsidiary of Co-operative Bank of Kenya, has announced a reduction in its base lending rate from 15.5% to 15% per annum, effective November 1, 2025.
The move comes in response to the Central Bank of Kenya’s (CBK) recent decision to lower the Central Bank Rate (CBR) by 25 basis points to 9.25%, a strategic shift aimed at stimulating private sector credit and supporting economic growth.
Kingdom Bank New Rates
In a notice, Kingdom Bank stated that the new effective lending rate for variable rate facilities will be the revised base rate of 15% plus a margin ranging between 0.5% and 5%, depending on individual customer credit profiles.
The bank emphasized that the rate cut is part of its broader commitment to making credit more affordable, particularly for micro, small, and medium-sized enterprises (MSMEs), which form the backbone of Kenya’s economy.
“The effective lending rate for variable rate facilities will now be the new Base Rate of 15% p.a. plus a margin of between 0.5% and 5% p.a., depending on each customer’s credit profile.This reduction underscores our commitment to empowering growth in key sectors.”
The bank’s decision is expected to enhance access to credit, particularly for MSMEs, which have been disproportionately affected by high borrowing costs and delayed payments.
Kingdom Bank has encouraged customers to reach out for personalized credit assessments, noting that the margin applied to the base rate will vary based on individual creditworthiness.
The bank can be contacted via 0709881300 or [email protected] for further inquiries.
Kingdom Bank
Kingdom Bank is a subsidiary of the Co-operative Bank of Kenya, acquired in August 2020.
Originally founded as Jamii Bora Bank in 1999 by 50 destitute families in Nairobi, it transitioned into a commercial bank after merging with City Finance Bank in 2010.
Co-operative Bank acquired a 90% stake by subscribing to over 224 million new Class A shares.
Kingdom Bank specializes in serving Micro, Small, and Medium Enterprises (MSMEs), retail clients, and select corporates.
Its offerings include:
- Accounts: Transaction, Savings, Junior Savings, Chama, Diaspora, Micro Group
- Loans: Personal, Business, Unsecured Business, Micro-Finance, Chama Investment, Faidi Dada (for women), Salary Check-Off
- Trade Finance: Bid Bonds, Performance Guarantees, Letters of Credit
- Insurance Premium Financing
- Diaspora Banking & Leasing Services
- Digital Banking: KBID Internet Banking, mobile app, Kenswitch ATM network
In 2024, it was ranked 3rd best Tier 3 bank for customer experience by the Kenya Bankers Association, based on a survey of over 37,000 customers.
CBK Rate
The CBK has cut the Central Bank Rate (CBR) eight consecutive times since February 2024, bringing it down to 9.25% in October 2025.
While some banks, such as NCBA Group, have already announced reductions in their base lending rates—NCBA cut its shilling base rate to 13.52% in September—many top-tier lenders have been slow to follow suit.
The Kenya Bankers Association (KBA) has urged the CBK to continue lowering rates to support credit growth, especially for MSMEs.
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However, despite the rate cuts, credit growth recovery remains sluggish. Businesses are adopting a wait-and-see approach, anticipating further reductions before committing to new borrowing.
MSME Credit Access
Despite their critical role in Kenya’s economy, contributing over 34% of GDP and employing more than 15 million people, Micro, Small, and Medium Enterprises (MSMEs) continue to face significant barriers to accessing formal credit.
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According to the State Department for MSME Development, the total demand for MSME loans in Kenya is estimated at Ksh4 trillion, while commercial banks supply only Ksh700 billion, leaving a staggering Ksh3.3 trillion deficit.
This gap is attributed to a lack of formal documentation and credit history, high perceived risk by lenders, and collateral requirements that many MSMEs cannot meet.
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