Family Bank Cuts Lending Rate on New, Existing Kenya Shillings Loans after CBK's Adjustment
- The Central Bank of Kenya (CBK) lowered the Central Bank Rate (CBR) from 10.75% to 10% to stimulate economic growth in Kenya
- Following the move by the apex bank, Family Bank adjusted its lending rate by 100 basis points from 15.95% to 14.95%
- The revised rates, the lender said, apply to both new and existing credits that have been advanced to customers
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Bonface Kanyamwaya, a journalist at TUKO.co.ke, has more than 10 years of financial, economic, business, markets, and aviation expertise, providing insights into Kenya and global trends.
Family Bank has lowered its lending rates following the Central Bank of Kenya's adjustment of the Central Bank Rate (CBR) to 10% in April 2025.
Source: Twitter
In a public notice released by the lender early this week, the bank reduced its lending rates by 100 basis points from 15.95% to 14.95%.
The new rates for new loans are effective on 25 May 2025, while for existing loans, the rates are effective starting 15 June 2025.
The bank clarifies that under its risk-based credit pricing approach, the ultimate lending rate will be decided by customer-specific credit profiles.
"Following the revision of the Central Bank Rate (CBR), we wish to inform our customers that we shall adjust our Family Bank base lending rate downwards by 100 basis points from 15.95% to 14.95%.
"The effective lending rate will be the Family Bank lending rate plus a margin based on the customer's credit risk profile," said the lender in a recent notice which was seen by TUKO.co.ke.
When did Family Bank reduce its lending rate?
This was not the first time the lender was reducing its lending rate.
On Monday, 17 February 2025, the lender reduced its minimum lending rate from 17.25% to 15.95%.
The lender said then that the move was meant to support business growth in Kenya and was in line with the adjustment of the Central Bank Rate (CBR) from 11.25% to 10.75% on 5 February 2025.
What was Family Bank's lending rate in March?
The CBK reported that the average lending rates for commercial banks fell to 15.8% in March 2025 from 16.4% in February and 17.2% in November 2024.
Due to the improved demand and falling lending interest rates, commercial bank lending to the private sector saw a marginal increase of 0.2% in March 2025 after it shrunk by 1.3% in February.
However, the gross non-performing loans (NPL) to gross loan ratio rose from 16.4% in December 2024 to 17.2% in February 2025.
Source: UGC
Family Bank receives KSh 7.2 billion from European lender
In other news, the European Investment Bank Global has advanced KSh 7.2 billion to the lender, which Family Bank will match.
The funding to Family Bank aims to expand credit access to women and youth-led businesses in the country.
This is part of the European Union's Global Gateway strategy to promote trade, manufacturing, agriculture, climate action, and services, which are key priorities in Kenya.
Proofreading by Asher Omondi, copy editor at TUKO.co.ke.
Source: TUKO.co.ke
