The Central Bank of Kenya (CBK) has unveiled a new Risk-Based Credit Pricing Model (RBCPM) set to transform how banks price loans by linking rates directly to borrowers’ risk profiles.

• The new model will take effect on September 1, 2025, for all new variable-rate loans.
• The Kenya Shilling Overnight Interbank Average (KESONIA) will replace the current overnight interbank average rate as the benchmark for variable-rate loans.
• Banks will be required to disclose all costs, including origination, processing, negotiation, and commitment fees, and publish their weighted average lending rates online.