National Bank of Kenya, a subsidiary of Access Bank PLC, has announced a shift in its lending strategy with the adoption of a Risk-Based Credit Pricing Model, replacing the longstanding NBK Base Rate system.
In a public notice issued on August 4, the bank revealed that the transition will roll out in two phases: effective Aug. 1, 2025, for new loans and September 1, 2025, for existing loans.
Under the new model, all applicable loans will be priced at the NBK Reference Rate of 12.9% plus a risk premium based on the borrower’s credit profile.
The move aligns with industry trends and regulatory guidance aimed at promoting responsible lending and better aligning credit risk with pricing.
“This new pricing model will apply to all loans currently priced off the NBK Base Rate,” the bank stated.
CBK Notice to Banks on Credit Pricing
The Central Bank of Kenya (CBK) had shifted back to using the interbank rate as the key benchmark for setting lending rates, stepping away from its previous plan to tie them to the Central Bank Rate (CBR).
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In a circular issued to commercial banks on July 30, CBK announced that interest rates on loans will now be based on a revised formula: the interbank rate plus a premium (K).
This decision signals a return to a more market-oriented approach, aligning loan pricing with real-time liquidity trends in the banking sector.
“CBK proposes the use of the Interbank Rate as the common reference rate for determining lending rates for all customers. The total lending rate will be ‘the Interbank Rate + Premium (K)’,” CBK said.
CBK noted that if the interbank rate cannot be used for any reason, banks are permitted to fall back on the CBR as a reference rate.
Banks have been given a three-month window to develop and gain board approval for their own risk-based pricing frameworks. Once approved, these must be submitted to CBK within 15 days for regulatory review.
The updated pricing framework will apply to all loans issued in Kenyan shillings, with foreign currency loans exempt due to their exposure to global financial variables such as exchange rate fluctuations.
National Bank Covers
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National Bank is also using the notice to promote its Bancassurance Intermediary products, including Elimisha Plus, Nawiri Endowment, and Last Expense covers, which offer financial security across health, education, and life needs.
Customers seeking more information can contact the bank through its official lines or visit any branch.
The bank stated that it remains fully regulated by the Central Bank of Kenya.
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