KCB Bank, Equity Bank and NCBA have reduced their base lending rates to 8.75%, extending the pass-through of the Central Bank of Kenya’s latest 25 basis point cut and cementing a policy-rate anchored response among the country’s largest lenders.
All three banks confirmed that new Kenya shilling variable-rate loans will be priced off the revised Central Bank Rate (CBR) plus a customer-specific premium under the Risk-Based Credit Pricing Model, reinforcing reliance on the policy benchmark rather than a full shift to the Kenya Shilling Overnight Interbank Average.
The Central Bank of Kenya lowered the Central Bank Rate from 9.00% to 8.75% on February 10, 2026.
The risk-based pricing framework is unified on margins but divided on benchmarks, creating distinct pathways through which monetary policy feeds into borrowing costs.
Together, Equity, KCB and NCBA account for a significant share of Kenya’s banking sector assets and private-sector credit, giving their pricing stance broad systemic influence.
Their coordinated reliance on CBR contrasts with Co-operative Bank’s decision to fully anchor existing variable-rate loans to KESONIA, the market-based benchmark introduced under the revised framework in August 2025.
Equity Bank said all new Kenya shilling variable-rate loans will be priced at CBR, currently 8.75%, plus a customer-specific premium.
Existing facilities already priced at CBR plus Premium will retain the structure, with the CBR component adjusting from 9.00% to 8.75% after the statutory 30-day notice period.
Loans disbursed before December 1, 2025 will continue under the Equity Bank Reference Rate plus margin until February 28, 2026, when they transition to CBR plus Premium as earlier communicated.
The bank said monthly instalments and loan tenors remain unchanged, although total interest payable will adjust to reflect the revised benchmark.
KCB followed with a similar repricing framework. All new local-currency variable-rate loans will be priced at a base rate of 8.75%, with the final lending rate determined by adding a customer-specific margin in line with the revised pricing model.
Existing facilities currently priced on the CBR will have the benchmark component adjusted to 8.75%, effective 30 days from February 11, 2026.
For variable-rate loans issued on or before November 30, 2025, KCB said they will continue under existing terms and transition to the Risk-Based Credit Pricing Model on February 28, 2026, with repricing taking effect from March 1, 2026. The lender added that existing customers will not be subjected to new fees applicable to fresh facilities.
Also Read: Why Banks Are Sticking with CBR as Opposed to KESONIA
NCBA has now joined the repricing wave. The bank said all new Kenya shilling variable-rate facilities booked from February 12, 2026 will apply a base rate of 8.75% per annum. Facilities granted from December 1, 2025 under the revised pricing framework will apply the new base rate effective March 12, 2026, while loans issued before December 1, 2025 will migrate to the Risk-Based Credit Pricing Model on February 28, 2026.
NCBA said applicable lending rates will comprise the CBR base plus a customer-specific margin, with all fees and total cost of credit disclosed in line with Central Bank of Kenya requirements.
KESONIA is derived from actual overnight interbank transactions and adjusts automatically with liquidity conditions, while CBR reflects Monetary Policy Committee decisions and changes in discrete steps. Although the two rates have tracked closely in recent months, their transmission mechanics differ, especially across easing and tightening cycles.
CBK has not issued binding guidance mandating exclusive use of KESONIA, allowing banks discretion in selecting reference anchors. The benchmark now sits at its lowest level since early 2024 as the regulator seeks to stimulate private-sector credit growth, support economic activity and sustain declining inflation and non-performing loan trends.
