As Kenya’s financial sector continues to adapt to changing economic tides, interest rates have emerged as a central concern for borrowers and businesses alike. With the Central Bank of Kenya (CBK) easing its monetary policy throughout late 2024 and into 2025, commercial banks have responded—though not all at the same pace. If you are looking for the most affordable loans today, here is the latest picture.
CBK Cuts Rates Again – What It Means for Borrowers
In a significant move on 10 June 2025, the CBK slashed its benchmark Central Bank Rate (CBR) to 9.75%, its lowest point in nearly two years. This marked the third major rate cut since August 2024, when the easing cycle began.
Also Read: How Affordable Stanbic Bank Kenya’s Vehicle and Asset Finance Can Help You Grow
This policy stance has encouraged lending, reduced borrowing costs, and signalled optimism about controlling inflation while boosting private sector activity. As a result, the average commercial lending rate dropped to 15.4% in May, down from 17.2% in November 2024.
Kenya’s Cheapest Bank Loans – Updated List (June 2025)
For cost-conscious borrowers, these banks currently offer the most competitive loan rates in Kenya:
| Bank | Interest Rate (%) |
|---|---|
| Access Bank Kenya | 11.46 |
| Standard Chartered | 15.28 |
| Stanbic Bank | 15.36 |
| Equity Group | 16.07 |
| Diamond Trust Bank (DTB) | 16.80 |
| KCB Bank | 16.84 (Base rate now 14.6) |
| Co-operative Bank | 16.90 (Base rate now 14.5) |
| I&M Bank | 17.86 |
| NCBA Bank | 18.04 |
| Absa Bank | 18.95 |
Noteworthy Updates:
- KCB reduced its base lending rate from 15.6% to 14.6% in February 2025.
- Co-operative Bank cut its base rate from 16.5% to 14.5%, reflecting its support for more accessible credit.
These downward adjustments are significant for small businesses, salaried workers, and investors seeking credit without excessive interest burdens.
The Most Expensive Loans in Kenya
At the other end of the spectrum, some lenders still maintain high interest rates:
| Bank | Interest Rate (%) |
|---|---|
| Middle East Bank | 23.75 (Unsecured loans) |
| Credit Bank | 20.35 |
| CIB Kenya | 20.20 |
| HF Group | 20.17 |
| Sidian Bank | 19.95 |
These institutions tend to cater to riskier lending segments or operate on models less sensitive to CBK’s policy easing. However, for many borrowers, these rates remain prohibitive.
Behind the Numbers – Why Rates Are Dropping
CBK’s monetary easing campaign is intended to stimulate lending to the private sector, which had slowed by 1.1% in the 12 months to November 2024. The push includes direct appeals from Governor Dr Kamau Thugge, who has repeatedly called on banks to reduce their lending rates in tandem with base rate cuts.
Nevertheless, the Kenya Bankers Association (KBA) warns that reductions will be gradual. Many banks rely on higher-cost deposits to fund loans, and repricing credit portfolios takes time.
Savings and Deposit Rate Shifts
While lending rates have dropped, deposit rates declined modestly to 10.41% in December 2024, while savings rates rose from 3.54% in November to 4.25% in December, according to CBK figures. The changing landscape suggests a shifting balance between encouraging consumer saving and fuelling economic activity through affordable credit.
The next Monetary Policy Committee (MPC) meeting is scheduled for August 2025, and further easing remains a possibility, especially if inflation stabilises and private sector lending continues to lag.
Borrowers should keep an eye on individual bank announcements, as competition intensifies and more banks adjust their lending and deposit rates downward.
If you are shopping for a personal or business loan, 2025 may be your best opportunity yet—especially if you bank with institutions like Access Bank, Stanbic, or Standard Chartered. Meanwhile, banks like Middle East and Credit Bank still charge top-tier interest and may warrant caution for cost-sensitive borrowers.
Tip: Always compare Annual Percentage Rates (APRs), not just base rates, and factor in any hidden fees or loan structuring costs.
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