mburu jeff 
KCB Bank
Kenya Commercial Bank (KCB) has announced a reduction in its loan interest rates. Following the Central Bank of Kenya’s(CBK) recent adjustment of the Central Bank Rate (CBR)
KCB said that their loan interest rates will go down from 14.6 percent to 13.85 percent.
New loans will have the lower rate starting April 11, 2025. For loans people already have, the new rate will start on May 11, 2025.
KCB explained that the actual interest rate for each person will depend on how risky it is to lend to them.
This is based on their rules for pricing loans which is Risk-Based Credit Pricing Model.
These new rates only apply to loans in Kenyan Shillings.
According to KCB this change will make it cheaper to borrow money and help the country’s economy grow.
CBK indicated that the committee had reduced the CBR by 75 basis points to 10.00 percent from 10.75 percent — the lowest the benchmark rate has been since May 2023.
The CBK noted that other big countries are also lowering their interest rates because of how their economies are doing.
The CBK stated they lowered the rate to encourage banks to lend more money to businesses and people, which will help the economy.
They also want to keep the Kenyan Shilling stable.
“The Committee concluded that there was scope for a further easing of the monetary policy stance to stimulate lending by banks to the private sector and support economic activity, while ensuring exchange rate stability,” read part of the statement.
The CBK will watch to see if these changes work and may take more action if needed.
The CBK also said that banks lent a little more money (0.2 percent) in March 2025 compared to February, when they lent less (1.3 percent).
This is because the Kenyan Shilling has become stronger, and interest rates are going down, so more people want to borrow.
“The MPC will closely monitor the impact of the policy measures as well as developments in the global and domestic economy and stands ready to take further action as necessary in line with its mandate,” CBK noted.
At the same time, CBK revealed Commercial bank lending to the private sector recorded a modest growth of 0.2 percent in March 2025 from a contraction of 1.3 percent in February.
The average interest rate that banks charge went down to 15.8 percent in March 2025. It was 16.4 percent in February and 17.2 percent in November 2024.
The Committee also authorized the change of the applicable interest rate on the Discount Window from the current 300 basis points above CBR to 75 basis points, which will be the upper bound of the interest rate corridor.
The CBK also decided to make the range for interest rates around the CBR smaller. This is to make their control of interest rates better.
