Equity Bank (Kenya) Ltd has announced a 300-basis-point (3%) reduction in interest rates on all new and existing Kenya Shilling-denominated credit facilities. The new rates take effect on February 13, 2025, for new loans and March 1, 2025, for existing loans.
This decision follows the Central Bank of Kenya’s (CBK) recent move to lower the Central Bank Rate (CBR) by 50 basis points to 10.75% and reduce the Cash Reserve Ratio (CRR) by 100 basis points to 3.25%. The reduction aims to ease borrowing costs for businesses and households while stimulating economic activity.
“We understand the financial pressures facing Kenyans today, and we’re committed to doing our part to ease that burden,” said Moses Nyabanda, Managing Director of Equity Bank Kenya. “This rate cut is about more than just lower interest rates; it’s about opening doors for Kenyans to invest in their businesses, support their families, and their livelihoods.”
This marks the third time in six months that Equity Bank has slashed its lending rate, following previous cuts in September and November 2024. The revised rates will include an Equity Bank Reference Rate (EBRR) of 14.39% plus a margin that varies based on customer risk profiles.
Lower interest rates are expected to boost business expansion, reduce operational costs, and create jobs. For households, lower rates will mean reduced loan repayments, increased disposable income, and greater consumer spending.
CBK’s February 5, 2025, decision to reduce the CRR is expected to increase liquidity in the banking sector, further lowering borrowing costs and promoting credit growth in the private sector.
Equity Bank reaffirmed its commitment to supporting financial inclusion and economic growth. “By passing on the benefits of reduced interest rates, Equity Bank aims to create an environment where businesses can expand, employment opportunities increase, and communities thrive,” the bank stated.
