Co-op Bank slashes its base lending rates to 14.5 per cent

The Cooperative Bank of Kenya has reduced its lending rate by two per cent from 16.5 per cent per annum to 14.5 per cent taking the lead as the first bank in the country to reduce the interest rate immediately with such a big margin following last week’s Central Bank’s Monetary Policy Committee (MPC) directive.

Making the announcement this morning, the bank said the reduction from 16.5 per cent to 14.5 per cent per annum.

“The effective lending rate will be the Base Lending Rate of 14.5 per cent plus a margin of between 0 to 4 per cent per annum based on the individual customer’s credit profile,” the bank said in a statement.

The bank said the reduction in the lending rates is intended to stimulate credit growth to key sectors of the economy notably the Micro, Small, and Medium Enterprises (MSMEs) that are a critical engine to drive and sustain economic growth,” the bank said.

Last week the Central Bank’s Monetary Policy Committee (MPC) reduced the benchmark lending rate to 10.25 per cent warning that it will conduct on-site inspection to ensure that banks have also reduced their lending rates to the consumers.

CBK Governor Dr Kamau Thugge said banks, which fail to cut the interest rates in the latest effort by the bank to unlock cheaper credit for the business will be fined.  “The CBK may also fine banks that don’t pass on the benefits of reduced cost of funds to their customers,” Thugge said.

In response to the directive, only two commercial banks – M-Oriental bank and Corporative have so far made the decision.

However, whereas M-Oriental revealed its intention, it said the reduction takes effect from March 1, 2025. M-Bank will reduce its landing rates by

This is why consumers now laud the move taken by Coop Bank of Kenya to reduce the lending rate from 16.5 per cent to 16 per cent.  ‘We will revise our interest rate from 16.5 per cent to 16 per cent,” the bank revealed.