Kenyan Banks Begin Cutting Loan Rates After Central Bank Action.
Commercial banks in Kenya have started lowering their lending rates, marking the first major reduction since the Central Bank began easing its benchmark rate last August.
The average lending rate dropped to 16.89% in December from 17.23% in November, moving down from an eight-year peak. This shift follows multiple cuts in the Central Bank Rate (CBR), which stands at 11.25%.
Four banks led the change. Citibank NA Kenya, Standard Chartered Bank, Victoria Commercial Bank, and Stanbic Bank reduced rates by at least 1.75 percentage points. Standard Chartered offers the lowest rate among major banks at 15.28%, followed by Stanbic at 15.36%.
Yet some banks moved in the opposite direction. Premier Bank raised its rate by 3.43%, Middle East Bank by 0.83%, and Habib Bank by 0.14%. Other large banks like Equity, KCB, and Cooperative Bank charge between 16% and 17%.
The Kenya Bankers Association expects borrowers to see more benefits by March. Banks say they must wait for high-rate deposits to mature before making deeper cuts.
Average deposit rates fell from 11.14% in August to 10.45% in December. Credit demand dropped 1.1% in November, the lowest in 22 years. The central bank aims for 12-15% credit growth to support the economy.
CBK Governor Kamau Thugge had pressed banks to lower rates after three CBR cuts since August. The upcoming Monetary Policy Committee meeting may bring further changes to the benchmark rate.
These reductions could help both businesses and households. Lower rates typically boost borrowing, increase investment, and reduce loan defaults. The banking association has called for more CBR cuts to boost private-sector lending.
Commercial banks in Kenya have started lowering their lending rates, marking the first major reduction since the Central Bank began easing its benchmark rate last August.
The average lending rate dropped to 16.89% in December from 17.23% in November, moving down from an eight-year peak. This shift follows multiple cuts in the Central Bank Rate (CBR), which stands at 11.25%.
Four banks led the change. Citibank NA Kenya, Standard Chartered Bank, Victoria Commercial Bank, and Stanbic Bank reduced rates by at least 1.75 percentage points. Standard Chartered offers the lowest rate among major banks at 15.28%, followed by Stanbic at 15.36%.
Yet some banks moved in the opposite direction. Premier Bank raised its rate by 3.43%, Middle East Bank by 0.83%, and Habib Bank by 0.14%. Other large banks like Equity, KCB, and Cooperative Bank charge between 16% and 17%.
The Kenya Bankers Association expects borrowers to see more benefits by March. Banks say they must wait for high-rate deposits to mature before making deeper cuts.
Average deposit rates fell from 11.14% in August to 10.45% in December. Credit demand dropped 1.1% in November, the lowest in 22 years. The central bank aims for 12-15% credit growth to support the economy.
CBK Governor Kamau Thugge had pressed banks to lower rates after three CBR cuts since August. The upcoming Monetary Policy Committee meeting may bring further changes to the benchmark rate.
These reductions could help both businesses and households. Lower rates typically boost borrowing, increase investment, and reduce loan defaults. The banking association has called for more CBR cuts to boost private-sector lending.
