From December, Kenyan banks fully pivot to a revised risk-based credit pricing model that pegs all shilling variable-rate loans to the Kenya Shilling Overnight Interbank Average (KESONIA), plus a premium “K.” The six-month transition window from 1 September to 30 November has seen lenders rework their pricing models, seek board approvals and begin repricing new facilities, with some such as UBA and several tier-2 banks already cutting base lending rates ahead of the formal switch.
Thank you for reading this post, don't forget to subscribe!The KESONIA-anchored regime is meant to harmonise base rates across the industry, tie lending costs more closely to real-time money market conditions, and enhance transparency through mandatory disclosure of margins and the total cost of credit. Borrowers with stronger credit profiles are expected to benefit from lower effective rates over time, but the new system will also expose customers more directly to liquidity swings and policy moves, making December’s implementation phase a key test of how quickly cheaper credit actually reaches households and SMEs.
