KCB Bank Kenya has adjusted interest rates for new and existing local currency variable-rate loans following the Central Bank of Kenya’s reduction of the CBR to 9%, under the new Risk-Based Credit Pricing Model (RBCPM), effective from December 1, 2025.
KCB Bank Kenya has announced revisions to its local currency variable-rate lending in response to the Central Bank of Kenya’s (CBK) latest monetary policy decision. The CBR was reduced to 9% on December 9, 2025, prompting KCB to align its lending rates with the newly adopted Risk-Based Credit Pricing Model (RBCPM).
For new loans taken from December 11, 2025, the bank confirmed that interest rates will be calculated on a base rate of 9%, with a customer-specific margin applied in accordance with individual risk profiles. This ensures that borrowers’ final lending rates reflect both the central bank’s guidance and the borrower’s credit risk.
Loans applied for from December 1, 2025, will also be adjusted to align with the new base rate following the mandatory 30-day notice period, as stipulated by the CBK. This measure guarantees compliance with regulatory requirements while giving customers clarity on changes to their lending costs.
“The update of our loan pricing framework under the RBCPM demonstrates our commitment to transparency and regulatory compliance, ensuring our customers benefit from current monetary policy adjustments,” a KCB spokesperson said.
For existing variable-rate loans issued before December 1, 2025, the bank confirmed that the loans will remain under their current terms until they are transitioned to the new RBCPM framework. The full implementation for these facilities is scheduled for February 28, 2026, in line with CBK’s mandated transition period.
The bank emphasized that all applicable fees, charges, and total cost of credit will be fully disclosed to borrowers as required under CBK regulations. This is intended to enhance borrower awareness and support informed financial decision-making.
KCB has also reiterated that its Relationship Managers and contact center, reachable at +254711087000, are available to guide customers through the transition and answer queries related to loan adjustments. Customers may also visit any KCB branch across Kenya for in-person consultations.
“We thank our customers for their continued trust in KCB and remain committed to delivering financial solutions that are both customer-focused and compliant with central bank regulations,” the spokesperson added.
Financial analysts note that the adjustment in the base lending rate is expected to lower borrowing costs for eligible clients, potentially stimulating demand for credit, supporting business growth, and enhancing household financial flexibility.
The move aligns with Kenya’s broader economic policy to maintain stable credit conditions while ensuring that lending remains transparent, risk-sensitive, and responsive to prevailing macroeconomic factors.
