Family Bank Kenya has announced a reduction in its lending rates, aligning with the Central Bank of Kenya’s (CBK) recent adjustment of the Central Bank Rate (CBR) from 11.25 percent to 10.75 percent on February 5, 2025.
In a statement issued on Monday, February 17, the bank confirmed that it had lowered its minimum lending rates from 17.25 percent to 15.95 percent per annum. The move is aimed at fostering business growth and providing relief to borrowers amid shifting economic conditions.
The bank further clarified that the reduction applies to loans denominated in the Kenyan shilling.
“This adjustment means that both new and existing customers will benefit from lower interest costs on their loans, with reduced repayment amounts taking effect from March 1, 2025,” Family Bank stated.
Under the approved Risk-Based Credit Pricing Model, the final lending rate will be determined by the base rate plus an additional margin, which varies depending on the borrower’s credit risk profile.
Family Bank emphasized that the rate reduction reflects its continued commitment to being the “Preferred Bank for Biashara in Kenya.”
This marks the second time Family Bank has lowered its base lending rate in 2025. In December 2024, the bank’s average lending rate stood at 16.83 percent, slightly below CBK’s average commercial bank lending rate of 16.89 percent for the same month.
Meanwhile, CBK’s decision to lower the CBR was accompanied by a reduction in the Cash Reserve Ratio (CRR), which dropped from 4.25 percent to 3.25 percent. The measure was aimed at increasing liquidity in the banking sector and ensuring lending rates remain favorable.
CBK Governor Kamau Thugge also noted that on-site inspections had begun to ensure banks comply with the Risk-Based Credit Pricing Model. Under newly amended banking laws, financial institutions that fail to pass on lower borrowing costs to customers will face penalties.
For further details, customers are advised to contact their Relationship Manager, visit any Family Bank branch, or reach the bank’s Contact Centre at 0703095445.
