CS Kinyanjui explains drop in Bank loan rates from 19% to 12%

Kenyans seeking loans from commercial banks are facing lower borrowing costs than they did a few years ago, with Trade Cabinet Secretary Lee Kinyanjui revealing that some lenders have cut their interest rates to 12 per cent from the previous average of 18 to 19 per cent.

Kinyanjui said the reduction had made credit more affordable for individuals and businesses, attributing the change to prudent management of public finances and increased funds available within the banking sector.

Speaking during a radio interview on Tuesday, November 3, 2026, the CS argued that Kenya's financial institutions were now better placed to finance investment, pointing to the rising deposits held by banks and increased savings by Kenyans living overseas.

He recalled that borrowers previously faced considerably higher interest charges when seeking financing, but said the situation had improved, with some commercial banks now offering more competitive lending rates.

“Just about two, three years ago, you will recall that the average interest rate that you needed to pay for you to borrow money was in the range of 18, 19 and so on. But through prudent fiscal management, that number has come down and there are banks that are actually lending at about 12 per cent,” Kinyanjui said.

He dismissed concerns about the availability of credit, arguing that the country had sufficient money within its financial system to support borrowers.

According to the Cabinet Secretary, individuals and businesses with a good credit history could secure loans from local lenders as well as international banks with operations in Kenya.

The CS pointed to the growth in deposits held by commercial banks as another factor supporting increased lending, saying financial institutions had accumulated more funds that could be extended to borrowers.

He disclosed that deposits across the banking sector increased by 9.9 per cent in the previous year, with savings from Kenyans living abroad contributing to the growth.

Kinyanjui said more citizens in the diaspora were choosing to channel their money into the local economy rather than keeping it exclusively in foreign financial markets.

“We saw a nearly 9.9 per cent increase in deposits last year. And I think this is very significant. Kenyans, if you look at remittances from Kenyans abroad, they have decided they want to put their money in their own country,” he said.

He maintained that the growing deposits provided local financial institutions with resources to extend credit at what he described as reasonable interest rates.

Kinyanjui also pointed to the presence of international banking institutions in the country, saying their operations reflected confidence in Kenya's financial market.

Away from the banking sector, Kinyanjui called on Kenyans to recognise the country's potential to attract more foreign investment, particularly because of its location and access to major international markets.

He said Kenya's position in relation to the Middle East, Europe and the Far East gave it an advantage that could be used to attract investors in several industries.

The Cabinet Secretary identified manufacturing, refining and logistics as some of the sectors that could benefit from increased investment.

He also highlighted the ports of Mombasa and Lamu, saying they could be developed into major transhipment centres serving regional and international trade.

Kinyanjui argued that Kenya had geographical advantages that could not be easily replicated elsewhere, urging local investors to take a closer look at opportunities that foreign businesses were already identifying.

He said the country's location gave it an important role in connecting markets across different regions, creating room for businesses seeking to establish operations that serve multiple destinations.

“Our geographical positioning with respect to the continent is very significant. If you look at us in relation to the Middle East, Europe and the Far East, our strategic location is something you cannot change,” he said.

The CS maintained that Kenya could attract more capital into logistics and refining as investors seek to benefit from its access to international markets.