Kenya's banking system is getting a makeover because the Central Bank wants every new variable-rate loan tied to a single benchmark called KESONIA, which tracks what banks charge each other for overnight cash. The rate launched in September at about 9.59 percent and has since dropped to 9.25 percent. Banks got until December to start using it for fresh loans, and all existing variable-rate deals have to switch over by late February.
The whole point is making loan pricing way more transparent since KESONIA reflects actual transactions instead of random estimates that banks used to throw around. Borrowers with solid credit histories will score cheaper rates because lenders can subtract points from the base rate, while risky customers get hit with higher premiums. The central bank says this setup will help small businesses, women, and disabled people get better access to credit, and it lines Kenya up with global lending standards.
The whole point is making loan pricing way more transparent since KESONIA reflects actual transactions instead of random estimates that banks used to throw around. Borrowers with solid credit histories will score cheaper rates because lenders can subtract points from the base rate, while risky customers get hit with higher premiums. The central bank says this setup will help small businesses, women, and disabled people get better access to credit, and it lines Kenya up with global lending standards.
