CBK Cuts Base Rate, Lowering Lending Rates

Commercial banks’ weighted average lending rates have dropped following the Central Bank of Kenya (CBK) Monetary Policy Committee (MPC) decision to reduce the base rate to 12.75% from 13% in August 2024. This move has led tier 1 banks to lower their lending rates, benefiting consumers, especially those seeking personal loans.

Among the major banks, Kenya Commercial Bank (KCB) now offers the most competitive rate, with an average of 15.6% on personal loans. Cooperative Bank and Diamond Trust Bank (DTB) follow closely, charging 15.8% and 15.9% respectively. On the higher end, NCBA and Absa Bank remain the most expensive, offering rates of 19.91% and 19.12% respectively.

Financial analysts predict further interest rate cuts in October, driven by global trends such as the recent rate reductions by the US Federal Reserve and the Bank of England. This could further lower the cost of borrowing in Kenya, providing relief to businesses and consumers alike.