Headquarters Central Bank of Kenya (CBK) in Nairobi. Photo/ Courtesy.
Three of Kenya’s largest lenders Co-operative Bank, Equity Bank, and Standard Chartered have issued public notices announcing their transition to the Central Bank of Kenya’s (CBK) revised Risk-Based Credit Pricing Model.
The shift, which begins on 1 December 2025, will change how variable-rate Kenya Shilling loans are priced, with all existing facilities expected to transition by 28 February 2026.
Co-operative Bank said it will adopt the Kenya Shilling Overnight Interbank Average (KESONIA) as its lending reference rate for all new variable-rate credit facilities.
“The lending reference rate will be the Kenya Shilling Overnight Interbank Average (KESONIA) as publicly published by Central Bank of Kenya,” the bank stated, adding that it will publish applicable KESONIA rates monthly.
In its announcement, Equity Bank confirmed that all new Kenya Shilling variable-rate loans will be repriced using the Central Bank Rate (CBR) plus a customer-specific premium.
“All new variable-rate loan facilities will be priced based on Central Bank Rate (CBR) + K, where K represents a customer-specific risk-based premium,” Equity said, noting the premium will account for credit risk, shareholder return and lending costs.
Standard Chartered also outlined its transition plan, emphasising that the revised framework is guided by CBK’s August 2025 circular.
“Under the revised model, variable rate loans and advances will be priced using a common reference rate which is either the Kenya Shilling Overnight Interbank Average (KESONIA) or the Central Bank Rate (CBR),” the lender announced.
All three institutions confirmed that existing loans will shift to the new pricing structure by the end of February 2026, with customers receiving at least 30-day notices where required.
