NCBA Bank has joined Kenya’s largest lenders, KCB Group, Equity Bank, in repricing loans after the Central Bank of Kenya (CBK) lowered its benchmark rate to 8.75%.
New Loan Pricing Framework
The bank announced that 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 framework will adopt the new base rate effective March 12, 2026.
- Loans issued before December 1, 2025 will migrate to the Risk-Based Credit Pricing Model on February 28, 2026.
NCBA confirmed that applicable lending rates will comprise the Central Bank Rate (CBR) plus a customer-specific margin, with all fees and the total cost of credit disclosed in line with CBK requirements.
Benchmarks: CBR vs. KESONIA
The repricing highlights the ongoing debate between policy-based and market-based benchmarks:
- KESONIA is derived from actual overnight interbank transactions and adjusts automatically with liquidity conditions.
- 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 during easing and tightening cycles.
Regulatory Context
CBK has not mandated exclusive use of KESONIA, giving banks discretion in selecting reference anchors. With the benchmark now at its lowest level since early 2024, the regulator aims to stimulate private-sector credit growth, support economic activity, and sustain declining inflation and non-performing loan trends.
