The Kenya Bankers Association (KBA) has stated that existing loan customers will not be charged new fees under the upcoming risk based pricing model rollout that is expected to take full effect in March 2026. The announcement provides clarity for borrowers worried about additional processing or origination charges as lenders transition to the revised credit pricing system.
Under the new framework, bankers agreed that fees such as processing, origination, negotiation and commitment charges will only apply to new loans or top ups issued after the implementation of the risk based model. Borrowers with facilities disbursed before December 1 2025 will remain exempt from these extra costs as part of the transition arrangements agreed between banks and regulators. Existing customers will, however, need to sign revised terms and conditions as part of the migration to the updated model.
The revised Risk Based Credit Pricing Model (RBCPM) was introduced by the Central Bank of Kenya (CBK) to bring more transparency and fairness into how interest rates and loan costs are set. Under the model, banks price loans based on a common reference rate plus a customer specific risk premium and applicable fees. The common reference rate follows guidelines designed to align Kenya’s lending practices with global benchmarks while reflecting market conditions at home.
KBA highlighted that the shift to a uniform pricing framework aims to make the total cost of credit more transparent and customer centric. “Banks have assured customers with loans issued before December 1 2025, that they will not pay origination, processing, negotiation, or commitment fees as facilities migrate to the new Risk Based Credit Pricing Model by the end of February,” the association said in a statement outlining the industry position.
The transition timeline requires banks to begin pricing new lending products under the new model from December 1 2025, and complete migration of existing loan facilities by February 28 2026, making the framework fully operational by March 2026. The model links the cost of credit to a standard benchmark and a borrower’s credit risk profile rather than leaving pricing wide open to internal bank discretion.
For borrowers, this means greater predictability in loan pricing. Those taking out new loans will see fees such as processing charges reflected clearly in the total cost of credit disclosures published by lenders. Existing customers are being protected from these fees to avoid retroactive financial burdens for credit already extended under previous terms.
The exemption for existing loans has been welcomed by consumer groups and borrowers alike, who argued that sudden imposition of additional charges on ongoing facilities would have strained household and business finances. By assuring that only new loans will incur extra fees, KBA and banks hope to smooth the transition and avoid customer dissatisfaction.
However, some experts note that borrowers should still check revised terms carefully as loans migrate to the new pricing architecture. While banks will honor the no fee promise for existing loans, other aspects such as interest rates based on the new reference framework may still change over time.
As banks finalize their transition systems ahead of the March 2026 deadline, clear communication to customers about how fees are applied and what changes to expect will be central to maintaining consumer confidence in the new pricing regime.
