Kenya’s financial sector is experiencing a major shift following a key announcement by the Monetary Policy Committee (MPC) on December 9th, 2025. The Central Bank of Kenya (CBK) has revised the Central Bank Rate (CBR)—a move that significantly impacts both new and existing borrowers across the country.
In response, Equity Bank (Kenya) Limited has formally adopted the new rate and issued an important update on how this change affects loan pricing for all local currency variable-rate loans.
If you’re a current borrower or considering taking a new loan, here’s everything you need to know.
📉 CBR Revised to 9%: What Has Changed?
The Central Bank Rate has been reduced from 9.25% to 9%, marking a strategic adjustment aimed at stabilizing Kenya’s credit market and promoting affordability.
This new rate is now the foundation for loan pricing at Equity Bank, replacing its internal benchmark for older loans and immediately guiding new lending decisions.
⚖️ Impact Breakdown: New Loans vs. Existing Loans
✅ 1. New Local Currency Variable-Rate Loans
Effective: December 10th, 2025
All new loans issued from this date will use the updated CBR of 9%, plus the borrower’s individual customer premium (K).
✔️ Immediate Updates for Recent Borrowers
If you took a loan after December 1st, 2025, and it was priced using the previous 9.25% CBR, your pricing will now automatically adjust downward to the new 9% rate. This means instant savings.
👉 Key Insight:
If you’re applying for a new loan, you immediately benefit from a lower reference rate—good news if you’re planning a major purchase or business investment.
🕒 2. Existing Local Currency Variable-Rate Loans
These loans have historically been priced using the Equity Bank Reference Rate (EBRR), an internal benchmark.
🔄 Transition to the New CBR Framework
Equity Bank will officially transition all existing variable-rate loans from the EBRR to the new CBR of 9% + customer premium (K).
📅 Effective Date:
February 28th, 2026
✉️ Customer Notifications
Borrowers will receive a 30-day notice and formal variation letters, where required, outlining the exact changes to their loan pricing.
👉 Key Insight:
Expect a clearer, more standardized pricing structure once the shift to the CBR is complete.
🧭 Why This Change Matters
🌐 1. Greater Transparency
Switching to the CBR aligns all loan pricing with a public, regulated benchmark, making it easier for borrowers to understand and compare interest rates.
📉 2. Potential Cost Savings
With the CBR being lowered to 9%, many borrowers—new and existing—can expect reduced interest costs depending on their loan terms and premiums.
🏦 3. Regulatory Alignment
Equity Bank’s adoption of the CBR ensures full compliance with CBK’s guidelines, promoting consistency across the banking industry.
✔️ What Should Borrowers Do Now?
Whether you already have a loan or plan to apply for one soon, here are the steps you shouldn’t ignore:
🔍 1. Review Your Existing Loan Agreement
Check your facility letter to understand:
- Your current interest computation
- The premium (K) applied to your loan
- How the shift from EBRR to CBR may affect your monthly repayments
📬 2. Watch for Official Notices
From now through early 2026, expect:
- Formal 30-day notices
- Variation letters for applicable facilities
These documents will detail how your loan will transition to the new CBR framework.
☎️ 3. Reach Out for Clarification
Equity Bank encourages customers to seek guidance through:
- Your Relationship Manager
- The nearest Equity Bank branch
- The contact centre: 0763 000 000
🎯 Final Thoughts: A Positive Shift for Borrowers
Equity Bank’s move to adopt the updated CBR signals a more standardized, transparent, and customer-friendly lending environment. With immediate benefits for new borrowers and a clear transition plan for existing ones, the adjustment supports financial stability while offering potential savings.
Whether you’re managing an existing loan or planning to take out a new one, now is a good time to stay informed and ensure you understand how this change affects your repayment strategy.