Kenya’s two heavyweight lenders, KCB and Equity Bank, have moved swiftly to adjust the cost of borrowing after the Central Bank of Kenya reduced the Central Bank Rate to 9 percent.
In statements issued on 10 December, both banks confirmed that the revised pricing will apply to new variable–rate loans issued this month. Existing loans will shift to the new structure during the CBK–mandated transition period, which runs until 28 February 2026. The lenders also outlined the required customer notification procedures in line with regulatory guidelines.
KCB on its Part
KCB announced an immediate cut to its base lending rate following the CBR adjustment. All new shilling–denominated variable–rate facilities taken from 11 December 2025 will now be priced on the 9 percent base rate.
The overall interest charged will still depend on a customer-specific margin under the bank’s Risk-Based Credit Pricing Model, which took effect on 1 December.
KCB added that facilities applied for from 1 December will be repriced once the compulsory 30-day notice period lapses. Loans taken earlier will retain their current terms for now but will transition into the new model by the end of February 2026. Fees, charges and total cost of credit will all be aligned with CBK rules. Customers seeking clarity have been encouraged to reach out to their relationship managers or visit any branch.
Equity Bank’s Announcement
Equity Bank has taken a similar path. The lender confirmed that all new shilling variable–rate loans issued from 10 December will be priced using the revised 9 percent CBR plus the borrower’s individual premium.
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Facilities issued after 1 December will also be adjusted to reflect the drop from 9.25 percent to 9 percent. Existing variable–rate loans tied to the Equity Bank Reference Rate will migrate to the new CBR-based framework by 28 February 2026. Affected customers will receive the standard 30-day notice and, where needed, variation letters outlining the shift.
CBK’s Decision
The Monetary Policy Committee cut the CBR by 25 basis points to 9 percent during its 9 December meeting. The Committee noted that global growth remains resilient, supported by strong consumer demand and better financial conditions, particularly in the United States, although 2026 is expected to weaken slightly due to rising tariffs and persistent geopolitical tensions.
