February 27, 2025
Equity Bank Kenya has announced a reduction in interest rates on Kenya Shilling loans, effective November 18, 2024. This decision follows the Central Bank of Kenya’s move to lower the Central Bank Rate (CBR) from 12.75% to 12.0%, aiming to make credit more affordable for consumers.
Impact on Borrowers
The reduction in loan interest rates is expected to ease the financial burden on individuals and businesses, making it cheaper to access credit for investment, expansion, and personal use. Borrowers with existing loans linked to the CBR will benefit from reduced repayment costs, while new applicants can take advantage of lower financing costs.
Equity Bank CEO James Mwangi stated, “Our decision to lower interest rates aligns with our commitment to supporting economic growth by making credit more accessible to Kenyans. This move will empower businesses and individuals, fostering financial inclusion and economic development.” 
Banking Sector Response
Following Equity Bank’s announcement, other financial institutions are expected to review their lending rates in response to the Central Bank’s policy change. Analysts predict a more competitive lending environment, potentially driving further rate reductions across the banking sector.
The Central Bank of Kenya has welcomed the move, reiterating its goal of maintaining financial stability while ensuring that consumers benefit from favorable lending conditions.
Economic Implications
Lower interest rates could stimulate economic activity by encouraging borrowing and investment. Small and medium-sized enterprises (SMEs), which rely heavily on credit to operate and expand, stand to benefit significantly from this decision. Additionally, lower financing costs for consumers may boost household spending, contributing to overall economic growth.
Conclusion
Equity Bank’s decision to lower loan interest rates marks a significant shift towards more affordable credit in Kenya. As financial institutions adjust their lending strategies, consumers and businesses alike will be watching closely to see how these changes impact economic growth and financial accessibility in the coming months.
