KCB Bank Kenya will transition to the Central Bank of Kenya’s Revised Risk-Based Credit Pricing Model (RBCPM) starting December 1, 2025.
All new local currency variable-rate loans will follow the new framework, with rates determined by the Common Reference Rate plus a customer-specific risk premium. Existing loans will transition by February 28, 2026.
The notice released on Thursday says, under the revised model, lending rates for variable-rate loans will be calculated based on a Common Reference Rate plus a customer-specific risk-based premium, referred to by the bank as “K.”
According to KCB, “The Common Reference Rate shall be the policy rate (Central Bank Rate) under the Monetary Policy Implementation Framework.”
The RBCPM is designed to align lending rates with both market conditions and individual borrower risk profiles, enhancing transparency and fairness in credit pricing.
The move reaffirms KCB’s commitment to responsible lending while ensuring customers are aware of how loan costs are determined.
For existing local currency variable-rate loans, the bank confirmed that borrowers will continue under their current terms during the transition.
KCB assured the public that these loans will transition to the new framework by the end of the CBK-mandated transition period, set for February 28, 2026.
“Existing local currency variable-rate loans will continue under the current terms and will transition to the new framework by the end of the CBK-mandated transition period (February 28, 2026),” the bank noted.
KCB emphasised full disclosure of all applicable fees, charges, and the total cost of credit to customers, in compliance with CBK requirements.
“All applicable fees, charges, and the total cost of credit will be fully disclosed to customers in line with the CBK requirements,” the notice stated.
The bank also reassured its clients of ongoing support throughout the transition.
“The Bank remains committed to responsible lending and supporting our customers throughout this transition period and beyond,” KCB said, highlighting its role as a trusted financial partner.
Customers seeking further guidance or clarification can contact their Relationship Manager, the KCB contact centre at +254711087000, or any branch across the country.
The bank closed the notice with a message of appreciation to its clients, stating, “We thank you for your continued support and trust in KCB as your preferred financial partner.”
The implementation of the RBCPM is part of a broader initiative by CBK to strengthen the credit market by linking loan pricing more directly to borrower risk.
While new loans will immediately reflect the revised pricing, KCB has provided a clear timeline for transitioning existing loans, ensuring borrowers have sufficient time to adjust.
With this move, KCB joins other financial institutions in aligning with regulatory standards, while simultaneously offering customers greater clarity on how interest rates are determined.
Borrowers can now expect personalised risk-based pricing, enhancing transparency in lending and helping them make informed financial decisions.
KCB concluded the notice with its brand commitment, “For People. For Better,” signalling its focus on customer-centred banking as it implements these changes.
The transition to the new RBCPM framework marks a significant step in modernising Kenya’s credit market, aiming to create a more equitable system where loan costs reflect both prevailing market rates and individual borrower risk.
