Kenya’s major lenders, KCB and Equity Bank, have revised their loan pricing structures following the Central Bank of Kenya’s revision of the Central Bank Rate to 9%.
According to the statements on December 10, the changes will apply to new variable-rate loan facilities issued in December 2025.
This will also apply to existing loans during the CBK-mandated transition period, which ends on 28 February 2026.
Both banks have confirmed compliance with the new requirements and outlined customer notification procedures in line with CBK guidelines.
KCB Bank on Lending Rate Cuts
On its part, KCB Bank has announced a reduction of its base lending rate following the adjustment of the CBR to 9.0%.
The bank stated that new local-currency-denominated variable-rate loans taken on or after December 11, 2025, will be priced at a 9.0% base rate.
“New local currency denominated variable-rate loans taken from December 11, 2025, will be priced on a base rate of 9.0%,” read the KCB statement in part.
The final lending rate will include a customer-specific margin aligned with the Risk-Based Credit Pricing Model adopted from 1 December 2025.
KCB confirmed that all facilities applied for from 1 December 2025 will be repriced after the expiry of the mandatory 30-day notice period required by the Central Bank of Kenya.
Additionally, existing local-currency variable-rate loans taken before 1 December 2025 will continue under current terms. They will move to the new framework by the end of the transition period on 28 February 2026.
The bank further stated that all applicable fees, charges, and the total cost of credit will be aligned with CBK requirements.
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Customers seeking clarification have been directed to contact their Relationship Managers, the contact centre, or visit any KCB branch across the country.
Equity Bank Statement
Additionally, Equity Bank announced that all new local currency variable-rate loans issued from 10 December 2025 will be priced using the revised 9% CBR plus the applicable customer premium.
The bank stated that facilities issued after 1 December 2025 will also be adjusted to reflect the reduction of the benchmark rate from 9.25% to 9%, effective immediately.
“ALL NEW local currency variable-rate loans, effective 10th December 2025, will be priced under the revised CBR of 9%, plus the applicable customer premium (K). This change will also affect facilities issued after 1st December 2025, where such facilities pricing will accordingly be adjusted by the reduction in CBR from 9.25% to 9% effective immediately,” the statement read in part.
For existing variable-rate loans still linked to the Equity Bank Reference Rate, the transition to the CBR-based pricing framework will be completed by 28 February 2026.
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As per the statement, customers whose facilities are scheduled for transition will receive a 30-day notice and, where applicable, variation letters outlining the shift from EBRR to the CBR plus customer premium.
CBK Lowers Central Bank Rate by 25 Basis Points to 9.00%
The Monetary Policy Committee (MPC) lowered the Central Bank Rate (CBR) by 25 basis points to 9.00 per cent from 9.25 per cent at its December 9, 2025, meeting.
During its deliberations, the Committee noted that:
Global growth has remained resilient and is projected at 3.2 per cent in 2025, supported by improved financial conditions and strong consumer and business spending, particularly in the United States.
Nevertheless, global growth is projected to slow to 3.1 per cent in 2026, mainly due to higher trade tariffs. Weak global demand, elevated trade policy uncertainty, and heightened geopolitical tensions in the Middle East, as well as the Russia-Ukraine conflict, remain key risks to growth.
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