NAIROBI, Kenya, Feb 11 – Kenya Commercial Bank (KCB) and Co-operative bank have announced the reduction of their base lending rates.
The changes come in response to the Central Bank of Kenya’s revised Central Bank Rate (CBR) and Cash Reserve Ratio (CRR).
KCB has lowered its base lending rate from 15.6 percent to 14.6 percent per annum, effective February 10, 2025.
The bank emphasized that the final lending rate for customers will vary based on individual risk assessments and will be adjusted using the approved Risk-Based Credit Pricing Model.
This reduction applies to all shilling-denominated loans, with the exception of fixed-rate credit facilities.
Similarly, Co-op Bank Kenya announced an immediate reduction in its base lending rate, cutting it from 16.5 percent to 14.5 percent.
Like KCB, the bank clarified that the final interest rate for each customer will depend on their credit profile, with a margin of zero to four percent added to the base rate.
“We have reduced our Base Lending Rate from 16.5% to 14.5% per year – effective immediately! The final interest rate will be 14.5% + a small margin (0% to 4%), depending on your credit profile,” said Co-op Bank in a statement.
CBK had last week scaled down its base lending rate by 0.5 percent to 10.75 percent in what it says is anchored on enhancing the flow of credit to the private sector and reducing borrowing costs.
This move is expected to be replicated across the banking sector, with KCB and Coop Bank taking the lead following the directive.
In tandem, CBK lowered the Cash Reserve Ratio (CRR) for banks to 3.25 percent, a change expected to free up to Sh57 billion for lending.
This decision follows a series of rate cuts in late 2024, aimed at boosting economic activity, which had been slowing.
