The Central Bank of Kenya (CBK) has introduced a new Risk-Based Credit Pricing Model (RBCPM) which will anchor bank loan rates to the Kenya Shilling Overnight Interbank Average (KESONIA) starting September 1, 2025. This aims to increase transparency and better reflect borrower risk, moving away from banks' previous discretion in setting base rates.

• All new variable-rate loans in Kenya Shillings will be priced as KESONIA plus a premium “K,” along with fees and charges, effective September 1, 2025.
• Existing loans will transition to the new model by February 28, 2026.
• The CBK will publish KESONIA daily, and banks must disclose pricing details online and on the Total Cost of Credit (TCC) platform.
• This follows consultations and initial pushback from the Kenya Bankers Association (KBA), which favored the interbank rate over the Central Bank Rate (CBR).