CBK raises lending rate to 13%

CBK Sets a New Age of High-Interest Loans

The Central Bank of Kenya (CBK) has increased the lending rate to 13%, signalling substantial repercussions for both borrowers and commercial banks. This decision, issued by the Monetary Policy Committee (MPC), represents a significant shift in the borrowing environment and demonstrates the CBK’s commitment to resolving current economic issues.

The move to raise the lending rate comes amid rising worries about inflationary pressures and currency rate stability. By boosting the interest rate from its previous level of 12.50 percent, CBK hopes to impact borrowing rates across the financial system, delivering a clear signal to both banks and borrowers.


The February 6, 2024 new rate is in line with global economic predictions. According to current predictions, global growth in rates is expected to reach 3.1% and 3.2% in 2024 and 2025, respectively. These predictions indicate an upward trend for the global economy in the following years.

Meanwhile, for commercial banks, the regulator’s move is a command to raise lending rates. The loan rate established by the central bank is frequently used as a benchmark for commercial banks’ own lending rates. As a result, borrowers should expect increased loan interest rates, which will influence many sectors of the economy.

Small and medium-sized businesses (SMEs), which also rely significantly on bank finance for operations and growth, may see higher borrowing costs. Higher lending rates may provide hurdles for SMEs seeking cheap loans, limiting their capacity to invest, recruit, and expand.

At the bottom are individual borrowers who will also experience the effects of the rate increase. Borrowers seeking loan products, such as mortgages, personal loans, or auto finance, may expect increased interest rates on their borrowing. This increase interest rate may cause alterations to household budgets and spending patterns, impacting total consumption levels.

However, the CBK’s decision indicates its proactive stance in addressing economic imbalances and maintaining macroeconomic stability. Through this move, the regulator aims to curb inflationary pressures and ensure price stability in the economy.

A New Era of High-Interest Loans.

With the CBK’s decision to increase the lending rate to 13%, borrowers should expect a new age of high-interest loans. The rate rise sends a clear message that borrowing money will become more expensive overall, affecting both consumers and commercial banks.

Borrowers, particularly those seeking loans for businesses, property purchases, or personal spending, will certainly get money at higher interest rates witnessed over a decade ago.

Looking ahead, borrowers and banks alike will need to adapt to the changing financial landscape. Thus, this move calls for careful planning and strategic decision-making. Individuals and financial institutions must be ready to mitigate the impact of higher borrowing costs and navigate towards financial stability.

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