KCB Bank Kenya has reduced its base lending rate from 14.6% to 13.85% per annum, aligning with the Central Bank of Kenya’s (CBK) recent decision to ease the Central Bank Rate (CBR).
- •The revised rates take effect from 11th April 2025 for new loans and 11th May 2025 for existing facilities.
- •The move follows the CBK Monetary Policy Committee’s (MPC) meeting on 8th April 2025, where the benchmark CBR was slashed by 75 basis points to 10.0%.
- •This marks the fifth consecutive rate cut, reflecting a sustained monetary easing cycle aimed at supporting private sector credit growth and stimulating economic activity.
“The easing of the CBR is anchored on continued inflation stability and the need to boost economic momentum through improved access to credit,” the CBK noted in its post-meeting statement. Inflation cooled to 3.6% in March, well within the government’s target range of 2.5% to 7.5%, providing the MPC with room for accommodative policy action.
CBK Statement
KCB clarified that the final interest rate applicable to customers will depend on individual creditworthiness, evaluated under its Risk-Based Credit Pricing Model. The adjusted rate structure will apply only to Kenya Shilling-denominated facilities.
This approach aligns with the ongoing shift among tier-one lenders to price loans more accurately according to risk, enhancing credit efficiency while maintaining portfolio quality.
Credit Expansion Underway
The rate revision comes at a time when KCB Group continues to expand its loan book aggressively. Data shows that net loans and advances have grown from KSh 385.7 billion in 2016 to KSh 990.4 billion in 2024, following a peak of KSh 1.1 trillion in 2023.
This sustained lending growth reflects robust demand for credit and the bank’s strong balance sheet.
The new lower base rate is expected to reinforce this momentum by lowering the cost of borrowing and incentivizing uptake of personal, SME, and corporate loans.
