Borrowers in Kenya seeking the best deals on loans can find significant differences in interest rates across various banks, according to the latest data from the Central Bank of Kenya (CBK).
The weighted average lending rates for personal, business, and corporate loans differ widely, depending on the institution and loan maturity, offering a range of opportunities for discerning consumers and businesses to secure favorable terms.
The report, which provides a breakdown of average lending rates as of July 2024, shows that Middle East Bank Kenya Limited has the highest overall lending rate at 20.96%, while Ecobank Kenya Limited offers the lowest at 14.72%.
For those looking for personal loans, Premier Bank Kenya Limited and Kingdom Bank Limited emerge as competitive options, with relatively low rates for shorter-term loans. Premier Bank Kenya Limited offers an average rate of 9.0% across all maturities for personal loans, the lowest in the market. Kingdom Bank Limited, meanwhile, offers rates as low as 12.81% for personal loans over five years, providing a viable option for borrowers who prefer extended repayment periods.
In the business loan category, rates are similarly varied. Diamond Trust Bank Kenya Limited and UBA Kenya Bank Limited are among the most affordable for business overdrafts, with rates at 12.03% and 13.83%, respectively. For longer-term business loans, Standard Chartered Bank Kenya Limited offers a rate of 13.58% for loans between one to five years, positioning itself as a strong contender for businesses looking to manage costs.
| Bank Name | Personal Loans Overdraft (%) | Business Loans Overdraft (%) | Corporate Loans Overdraft (%) | Overall Rate (%) |
|---|---|---|---|---|
| Premier Bank Kenya Limited | 9.00 | 9.00 | 9.00 | 9.00 |
| Ecobank Kenya Limited | 4.75 | 10.40 | 4.65 | 14.72 |
| UBA Kenya Bank Limited | 3.83 | 13.00 | 13.00 | 15.30 |
| Diamond Trust Bank Kenya Limited | 12.03 | 12.40 | 12.44 | 12.39 |
| Standard Chartered Bank Kenya Limited | 13.58 | 13.58 | 13.67 | 15.02 |
| Middle East Bank Kenya Limited | 24.36 | 20.40 | 22.38 | 20.96 |
| NCBA Bank Kenya PLC | 21.03 | 21.62 | 20.76 | 21.14 |
| Co-operative Bank of Kenya Limited | 13.00 | 16.14 | 16.24 | 15.18 |
| Equity Bank Kenya Limited | 12.20 | 14.40 | 14.96 | 16.02 |
| Family Bank Limited | 16.97 | 17.94 | 17.95 | 16.13 |
| Gulf African Bank Limited | 13.71 | 16.51 | 15.17 | 15.68 |
| Habib Bank A.G Zurich | 14.75 | 15.54 | 14.54 | 15.35 |
| Middle East Bank Kenya Limited | 24.36 | 21.94 | 22.22 | 20.96 |
On the corporate side, borrowers will find even more variation. Standard Chartered Bank Kenya Limited provides one of the lowest rates at 13.67%, making it an attractive option for large enterprises looking to minimize financing costs. In contrast, Middle East Bank Kenya Limited charges as much as 22.22% for corporate loans over five years, the highest in this category.
Wide Range of Overdraft Rates
Overdraft rates, which allow businesses and individuals to draw more money than is available in their accounts, also show significant differences. The lowest rate for overdrafts is offered by UBA Kenya Bank Limited at just 3.83%, while the highest is Middle East Bank Kenya Limited at 24.36%. For businesses that rely on overdraft facilities to manage cash flow, these differences could translate to substantial savings or costs.
Impact of Loan Maturity
The CBK data also highlights how loan rates tend to increase with longer maturities, though there are notable exceptions. For example, for business loans over five years, HFC Limited stands out with one of the highest rates at 21.94%, compared to NCBA Bank Kenya PLC’s relatively moderate rate of 21.62%. These differences suggest that long-term borrowers need to be particularly careful in comparing offers across banks.
Strategic Positioning by Banks
Some banks have positioned themselves strategically to attract specific categories of borrowers. For instance, Habib Bank A.G Zurich offers higher rates on personal loans, with an average of 19.23% for loans over one to five years, indicating a more cautious lending approach to individual borrowers. Conversely, Ecobank Kenya Limited, with an overall rate of 14.72%, appears to be focusing on capturing a broader base by offering competitive rates across all loan types.
For small and medium-sized enterprises (SMEs), securing a loan at a favorable rate can be vital for growth and sustainability. Co-operative Bank of Kenya Limited, with a business loan rate of 16.14% for loans over five years, and Equity Bank Kenya Limited, offering 18.02% for corporate loans, present themselves as middle-ground options that balance affordability with accessible credit.
