KCB Bank Implements New Base Lending Rate Framework Under Revised Credit Pricing Model
KCB Bank Kenya has announced significant changes to its lending rate structure following the Central Bank of Kenya’s adjustment of the Central Bank Rate to 9.0%, effective December 1, 2025, introducing the new Rate-Based Credit Pricing Model (RBCPM).
KCB Bank Kenya has announced a restructuring of its lending rates in alignment with the Central Bank of Kenya’s monetary policy adjustments and the newly adopted Rate-Based Credit Pricing Model. The announcement, made through an official public notice, outlines how the bank will adjust both new and existing loan facilities under this reformed lending framework.
Effective immediately from December 1, 2025, KCB Bank has established a base rate of 9.0% for all newly issued local currency denominated variable-rate loans. This base rate represents the foundation upon which customer-specific margins will be applied, creating a tiered pricing structure that reflects individual creditworthiness and risk profiles. The final lending rate for each customer will be determined by adding their customized margin to this base rate, ensuring transparency and differentiation in pricing across the customer portfolio.
For customers with existing variable-rate loans that were taken out before December 1, 2025, KCB Bank has committed to a phased transition approach. These loans will initially continue operating under their current terms and conditions. However, they will transition to the new framework by February 28, 2026, providing a 90-day migration period. This phased approach allows existing borrowers time to adjust to the new pricing methodology while ensuring compliance with the Central Bank of Kenya’s mandated transition timeline.
The bank has emphasized its commitment to customer protection and transparency by pledging to fully disclose all applicable fees, charges, and the total cost of credit to customers in line with CBK requirements. This disclosure-based approach ensures that borrowers have complete visibility into the true cost of their borrowing and can make informed financial decisions.
KCB Bank has extended an invitation to customers requiring clarification or consultation regarding the new lending framework. The bank has made itself accessible through multiple channels, including direct contact with relationship managers, a dedicated contact center available at +254711087000, and numerous branches strategically located across the country. This multi-channel approach ensures that customers can easily access support and guidance during the transition period.
The implementation of this new Base Lending Rate framework represents KCB Bank’s adaptation to Kenya’s evolving monetary policy environment and its commitment to operating under a more transparent and standardized credit pricing methodology, reinforcing the bank’s positioning as a customer-centric financial institution.
