The Central Bank of Kenya has formally adopted the revised risk-based credit pricing model as the new reference in determining the interest rates earned on loans acquired through commercial banks in Kenya.
The move is a paradigm shift from the initial Central Bank Rate (CBR), which was solely determined by the regulator and passed through to commercial banks.
In a statement on Tuesday, August 26, CBK Governor Kamau Thugge said that beginning September 1 this year, all new variable rate loans would be priced under the revised risk-based credit pricing model.
Similarly, the regulator noted that the existing variable-rate loans would shift to the new system beginning February 28, 2026, after a 6-month transition period.
