The Central Bank of Kenya (CBK) has introduced a revised Risk-Based Credit Pricing Model (RBCPM), aiming to lower interest rates by changing how banks determine lending charges. This new framework, revised after extensive feedback, adopts the Interbank Rate as the benchmark for loan pricing, replacing the previously proposed Central Bank Rate (CBR).

• The new model uses the Interbank Rate compounded in arrears as the benchmark.
• The CBK received 45 responses from stakeholders, including 13 commercial banks, the International Monetary Fund (IMF), and the Kenya Bankers Association (KBA).
• Banks will have a six-month transition timeline to implement the new model, with three months for board approval and three months for full implementation.