KCB Bank has announced its transition to the new credit pricing model, the revised Risk -Based Credit Pricing Model (RBCPM) effective December 1, 2025.
The move follows the launch of the new framework by the Central Bank of Kenya (CBK) in August 2025, in a bid to enhance transparency in lending rates and allow easy transmission of costs or benefits from changes on the Central Bank Rate (CBR).
Under the model, interest rates on new variable-rate loans will be based on a common reference rate plus a customer-specific risk-based premium (“K”). Premium K constitutes the bank’s operating costs related to lending, expected shareholders return, and borrower’s premium. According to the CBK, the overnight interbank average rate serves as the common reference rate for determining lending rates for all variable rate loans with the CBR as an alternative where the former is not applicable.
KCB on existing local currency loans
KCB Bank noted that the existing local currency variable-rate loans will continue under the current terms and will transition to the new framework by the end of February 2026 as announced by the CBK.
KCB added that all applicable fees, charges, and the total cost of credit will be fully disclosed to customers in line with CBK’s requirements. The lender reaffirmed its commitment to responsible lending and support to its customers through the transition period and beyond.
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