The Central Bank of Kenya (CBK) has shifted its reference for pricing bank loans back to the interbank rate, moving away from the Central Bank Rate (CBR) as its primary benchmark. This change aims for a more market-driven pricing model, with a new formula based on the Interbank Rate + Premium (K).

• All commercial banks have been given three months to develop and submit risk-based credit pricing models to the CBK for approval.
• The new model applies to all Kenyan shilling-denominated loans.
• Banks must publish rates and charges on the Total Cost of Credit website during the transition to enhance transparency.