Equity Bank Kenya is stepping up to support its customers by cutting interest rates below 26%—just in time for a key meeting with the Central Bank of Kenya (CBK). This move aims to pass on the benefits of reduced benchmark rates to borrowers and ease financial pressure.
The bank announced that it has lowered its base rate, the Equity Bank Reference Rate (EBRR), to 17.39% from 17.83%. This means the maximum loan rate is now capped at 25.89%, including an 8.5% margin. The latest cut brings down the previous 26.33% rate that had been in place since September, coming after the CBK’s Monetary Policy Committee trimmed the Central Bank Rate (CBR) to 12% from 12.75% in October.
According to James Mwangi, CEO of Equity Group, this reduction will provide immediate relief to customers, allowing both new and existing borrowers with Kenya shilling-denominated loans to enjoy lower borrowing costs. “We’re committed to making credit more affordable to empower small businesses, entrepreneurs, and individuals, helping them actively contribute to Kenya’s growth story,” Mwangi shared.
This proactive rate cut makes Equity Bank the first to take such a step following the CBK’s CBR reduction, demonstrating the bank’s dedication to customer support ahead of the upcoming CBK and bank CEOs meeting.
The CBK has been urging banks to pass on the benefits of reduced benchmark rates to customers more swiftly, noting that while banks have been quick to cut deposit rates, they’ve lagged in adjusting lending rates. Equity Bank’s move is a positive shift that shows their responsiveness to these regulatory pushes.
This year marks the second instance of Equity Bank reducing its rates, following earlier cuts in response to a previous CBR reduction. The CBK had also cut the CBR incrementally earlier in August and October, aligning with global trends seen in places like the US and Europe, where central banks have similarly adjusted rates to stimulate economic growth amid cooling inflation.
