How the new CBK loan pricing formula will affect consumers and banks

The Central Bank of Kenya (CBK) has unveiled a new loan-pricing framework that will see the Kenya Shilling Overnight Interbank Average (KESONIA) replace opaque internal benchmarks as the reference rate for all variable-rate loans. The shift, which takes effect on September 1, 2025 for new facilities, is one of the most significant reforms in Kenya’s credit market in over a decade. Transparency KESONIA reflects the weighted average of overnight interbank lending rates, offering a transparent benchmark that closely tracks the CBK’s policy stance through the Central Bank Rate (CBR). Unlike past regimes, where banks set their own internal base rates, borrowers will now see .......