Equity Bank Kenya has announced a reduction in interest rates for all new and existing Kenya Shilling-denominated loans, with the new rates taking effect from February 13, 2025, for fresh credit facilities and from March 1, 2025, for existing loans.
The move follows the Central Bank of Kenya’s (CBK) recent decision to lower the Central Bank Rate (CBR) by 50 basis points to 10.75% and the Cash Reserve Ratio (CRR) by 100 basis points to 3.25%. These adjustments were part of the CBK’s efforts to enhance liquidity and stimulate economic growth.
In a statement, Equity Bank affirmed its commitment to offering more affordable credit to support businesses and individuals.
“This adjustment aligns with our mission to enhance financial inclusion and ease the cost of borrowing, which is crucial for economic development,” the statement read.
The revised interest rates will be based on a new Equity Bank Reference Rate (EBRR) of 14.39%, in addition to a margin determined by individual customer risk assessments. The 3% (300 basis points) reduction will apply to a variety of loan products, benefiting borrowers across different sectors.
Equity Bank Kenya’s Managing Director, Moses Nyabanda, emphasized that the decision aims to provide relief to customers facing financial challenges. “Beyond lowering interest rates, this is about creating opportunities—helping Kenyans grow their businesses, support their families, and strengthen their financial stability,” he stated.
This marks the third time in six months that the bank has adjusted its lending rates, following similar reductions in September and November 2024.
Lower borrowing costs are expected to positively impact the economy by enabling businesses to access credit at reduced rates, thus lowering operational expenses and driving growth. Households will also benefit from lower loan repayments, freeing up disposable income and boosting consumer spending.
The CBK’s Monetary Policy Committee (MPC), which met on February 5, 2025, cited that the reduction in the CRR would inject additional liquidity into the banking system. This measure is expected to lower funding costs for lenders, ultimately making credit more accessible to the private sector.
Equity Bank’s rate adjustments are in line with these broader economic objectives, ensuring that customers directly benefit from the CBK’s stimulus policies.
