September 04, 2025, 04:35 PM EAT – Kenya’s bankers have unanimously agreed to implement the Central Bank of Kenya’s (CBK) revised risk-based credit pricing model, marking a significant milestone for the financial sector. The endorsement, announced today, signals a shift toward a more transparent and market-driven approach to loan pricing.
The Kenya Bankers Association (KBA) confirmed the decision in a statement released at 2:00 PM EAT, with KBA CEO Raimond Molenje stating, “This framework aligns with global best practices and will enhance access to credit.” The model, anchored on the Kenya Shilling Overnight Interbank Average (KESONIA), replaces the previous Central Bank Rate (CBR) benchmark. Lenders will now add a premium reflecting borrowers’ risk profiles, operating costs, and shareholder returns, with full disclosure required.
CBK Governor Kamau Thugge, speaking at a press briefing at 3:30 PM EAT, welcomed the move, saying, “This reform strengthens monetary policy transmission and promotes fairer lending.” The transition begins September 1, 2025, for new variable-rate loans, with existing loans shifting by February 28, 2026. Molenje, via his official X account (@RaimondMolenjeKBA) at 4:00 PM EAT, added, “We’re committed to making credit more accessible and transparent for all Kenyans.”
The decision follows months of consultations, with implementation details to be monitored by CBK. For more information, visit www.centralbank.go.ke.
