Absa Bank Kenya has announced a further reduction in its lending rates for new and existing Kenya shilling-denominated credit facilities, marking its third rate cut in just three months. The adjustment aligns with recent changes in the financial markets and government securities, following the Central Bank of Kenya’s (CBK) decision to lower the Central Bank Rate (CBR) and cash reserve ratio requirements.
In January 2025, the bank revised its Absa Base Rate (ABR) downward by 300 basis points from 16.5% to 13.5%, allowing more customers to benefit from lower loan interest rates. Additionally, for loan facilities linked to the CBR, Absa has adjusted its base rate from 12% to 11.25% in December, and more recently, to 10.75% last week, keeping in step with CBK’s monetary policy decisions.
The bank has also fully adopted the Risk-Based Pricing (RBP) model, which eliminates negotiation fees and determines interest rates based on a customer’s individual risk profile. “In this model, the final interest rate on a loan facility is customer-specific, comprising of a base rate plus a margin determined by the customer’s individual risk profile,” the statement explained.
As part of its latest rate revision, Absa has reduced its RBP base rate by 100 basis points, a move that takes immediate effect for new loans, while for existing loans, the change will be implemented on March 13, 2025, following the standard 30-day customer notice requirement.
Absa reaffirmed its commitment to “playing an integral role in driving customers’ growth ambitions through the provision of affordable and sustainable financial solutions.”
The continued rate reductions come as Kenya’s private sector seeks more affordable credit solutions to support business expansion and economic recovery.
