KCB Bank Kenya on Thursday revised its base lending rate to 8.75 per cent following the Central Bank of Kenya’s latest adjustment of the Central Bank Rate. The move aligns with the Risk-Based Credit Pricing Model and will affect new and existing variable-rate loans under specified timelines.
In a public notice, the lender stated, “Following the Central Bank of Kenya's (CBK) latest adjustment of the Central Bank Rate (CBR) to 8.75 percent, and in accordance with the Risk-Based Credit Pricing Model (RBCPM) which came to effect on December 1, 2025, KCB Bank Kenya Limited wishes to notify our customers and the public that it has revised its base lending rates.”
The revision will primarily affect variable-rate loans denominated in local currency. Under the new structure, “All new local currency-denominated variable-rate loans will be priced at a base rate of 8.75 per cent.”
The bank added that the final lending rate is based on a customer-specific margin, adjusted to the base rate, in line with the RBCPM framework.
For customers with existing variable-rate loans currently priced on the Central Bank Rate, the adjustment will also apply.
The notice explained, “All existing local currency variable-rate facilities currently priced on the CBR will have the CBR component of their lending rate adjusted to 8.75%, effective 30 days from February 11, 2026.”
Loans issued before the implementation of the Risk-Based Credit Pricing Model will transition under a defined timeline.
According to the bank, all existing local currency variable-rate loans issued before December 1, 2025, will continue under their current terms and will transition to the Risk-Based Credit Pricing Model (RBCPM) on February 28, 2026, as earlier communicated.
The Risk-Based Credit Pricing Model, which came into effect on December 1, 2025, links lending rates to a base rate plus a margin reflecting a borrower’s risk profile.
Under this framework, the base rate moves in tandem with changes to the Central Bank Rate, while the margin varies depending on individual credit assessment.
In its notice, KCB reaffirmed transparency in the implementation of the new rates. “All applicable fees, charges, and the total cost of credit will be fully disclosed to customers in compliance with CBK requirements,” it said.
The rate adjustment follows the CBK’s decision to set the Central Bank Rate at 8.75 per cent, a benchmark that influences commercial banks’ lending costs across the economy.
Changes to the CBR typically cascade into adjustments in loan pricing, especially for facilities directly tied to the benchmark rate.
For borrowers, the shift to an 8.75 per cent base rate may translate into lower borrowing costs depending on their individual margins. However, the final interest rate payable will continue to depend on the risk-based assessment applied to each customer.
KCB thanked customers for their continued confidence, stating, “We thank you for your continued support and trust in KCB as your preferred financial partner.”
The bank also invited customers seeking clarification to reach out through established channels, including relationship managers, the contact centre, or its branch network.
The announcement signals alignment between commercial bank pricing and the monetary policy direction set by the Central Bank of Kenya.
