Kenya’s Central Bank overhauls loan pricing model with new interbank benchmark
- The Central Bank of Kenya has overhauled credit pricing for commercial banks.
- Starting September 1, new loans will be linked to the KESONIA benchmark.
- Existing loans will transition to the new system by February 2026.
The introduction of the KESONIA benchmark marks a significant step towards enhancing transparency in Kenya's banking sector. However, the effectiveness of this model will depend on how well banks implement the new pricing structure and communicate the associated costs to borrowers. Ongoing monitoring will be essential to ensure that the intended benefits are realized without disproportionately affecting weaker borrowers.
