Kenya’s bankers have endorsed the Central Bank of Kenya’s (CBK’s) new risk-based credit pricing model, which will launch on September 1, 2025, for all new variable-rate loans. This reform introduces the Kenya Shilling Overnight Interbank Average (KESONIA) as the new base rate, replacing the CBR-based system.

• Existing variable-rate loans will transition to the new framework by February 28, 2026.
• The Kenya Bankers Association (KBA), led by chief executive Raimond Molenje, views this as an opportunity to expand access to credit.
• The new framework aims to improve transparency and link monetary policy to lending rates, with lending rates based on KESONIA plus a premium reflecting operating costs and borrower risk.