Several Kenyan banks are lowering their lending rates following the Central Bank of Kenya’s (CBK) decision to cut the Central Bank Rate (CBR) from 11.2 per cent to 10.7 per cent.
The move, aimed at stimulating economic growth and easing borrowing costs, is expected to benefit businesses and individual borrowers.
Several leading banks have announced reductions in interest rates on loans, affecting both new and existing credit facilities.
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Banks with the Lowest Lending Rates
1. Co-operative Bank
Co-operative Bank has announced a 2 per cent reduction in lending rate from 16.5% р.а. to 14.5% p.a,” reads part of the statement.
2. Kenya Commercial Bank (KCB)
KCB has also responded to CBK’s policy change, reducing its Base Lending Rate from 15.6 percent to 14.6 percent per annum
The new rates are already in effect, having taken effect on February 10, 2025.
3. Equity Bank
Equity Bank has announced a 3% reduction in interest rates on all new and existing Kenya Shilling-denominated credit facilities. The revised rates will be implemented as follows:
For new loans: Effective February 13, 2025
For existing loans: Effective March 1, 2025
The bank’s new rates include a revised Equity Bank Reference Rate (EBRR) of 14.39 percent, plus a margin determined by individual customer risk profiles.
4. NCBA Bank Kenya
NCBA has lowered its Base Lending Rate to 15.34% per annum, with the new rates taking effect from February 16, 2025.
5. I&M Bank
I&M Bank has announced a 2 per cent cut in its lending rates, effective March 1, 2025, in response to CBK’s directive.
Also Read: Equity Bank Reduces Loan Interest Rates for 3rd Time
Highest Lending Rates
1. M-Oriental Bank
Following the CBK’s decision to lower the CBR, M-Oriental Bank has adjusted its lending rates from 16.5 per cent to 16.0 per cent per annum.
The new rates take effect from March 1, 2025.
2. Absa Bank Kenya
Absa Bank Kenya has lowered its Base Lending Rate to 10.75% p.a. after a 100 bps cut, effective immediately for new loans and from 13th March 2025 for existing loans.
The Absa Base Rate (ABR) was also reduced by 300 bps to 13.5% in January, following the CBK’s recent CBR cuts.
CBR Rated Reduced
The reduction in the Central Bank Rate (CBR) means that Kenyans will now have access to more affordable loans for various purposes, including businesses, homes, and vehicles.
In its report released on Wednesday, February 5, the Monetary Policy Committee (MPC) said the rate cut will respond to a slowdown in economic growth, highlighting that economic activity had weakened during the first half of 2024.
Additionally, the committee projected that overall inflation would remain below the midpoint of the target range in the near term.
According to the Central Bank of Kenya (CBK), this outlook is supported by low fuel inflation, stable food prices, and a steady exchange rate.
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