KCB and Equity Bank Adjust Loan Rates Following Central Bank of Kenya CBR Cut
KCB Bank and Equity Bank have announced new loan pricing structures following the Central Bank of Kenya’s (CBK) decision to reduce the Central Bank Rate (CBR) to 9 percent, signaling a shift in Kenya’s lending landscape.
In a statement, KCB Bank said the revision aligns with its recently adopted Risk-Based Credit Pricing Model (RBCPM), which came into effect on December 1, 2025. The bank noted that the new rates will apply immediately to new borrowers, while existing customers will transition according to timelines set by the CBK.
“Following the latest adjustment of the Central Bank Rate (CBR) to 9.0 percent and in line with the RBCPM adopted from December 1, 2025, KCB Bank Kenya wishes to notify our customers and the public of the updated loan pricing framework,” the bank said.
Under the revised framework, new local currency variable-rate loans taken from December 11, 2025, will be priced on a base rate of 9.0 percent, with final lending rates adjusted according to a customer-specific margin. KCB added that all facilities applied for from December 1, 2025, will be adjusted after a mandatory 30-day notice period, in compliance with CBK regulations. Existing loans taken before December 1, 2025, will continue under current terms and transition to the new pricing structure within the CBK-mandated period.
“All applicable fees, charges, and the total cost of credit will be fully disclosed to customers,” KCB confirmed.
Equity Bank issued a similar notice, stating that the reduction in the CBR—from 9.25 percent to 9 percent—will affect new borrowers immediately, as well as facilities issued earlier in December.
“Following the revision of the Central Bank Rate (CBR) by the Monetary Policy Committee on December 9, 2025, we wish to notify our customers of the following changes,” Equity Bank said. The bank added that all new variable-rate loans from December 10, 2025, will be priced at the revised CBR of 9 percent plus an applicable customer premium. Loans issued after December 1 will also be adjusted accordingly.
For customers whose loans still reference the Equity Bank Reference Rate (EBRR), the transition to the CBR will take place by February 28, 2026. Affected customers will receive a 30-day notice and variation letters explaining the move from EBRR to CBR, including the applicable premium.
The CBK’s decision to cut the CBR by 25 basis points came during its Monetary Policy Committee (MPC) meeting on December 9, 2025, marking the ninth consecutive rate adjustment.
“The Monetary Policy Committee decided to lower the Central Bank Rate by 25 basis points to 9.00 percent from 9.25 percent,” CBK confirmed.
The regulator cited strong global economic growth, projected at 3.2 percent for 2025, driven by robust consumer and business spending, particularly in the United States, as a key factor behind the decision. CBK also noted that easing international oil prices, lower food inflation, and a broader trend of monetary easing by central banks globally contributed to the rate cut.
This move is expected to reduce borrowing costs for consumers and businesses, while supporting Kenya’s economic growth amid ongoing global uncertainties.
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KCB and Equity Bank Adjust Loan Rates Following Central Bank of Kenya CBR Cut