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Equity Bank reduces interest rate by 3 per cent to 14.39 per cent
In a statement, Equity Bank said the new interest rates are effective February 13th, 2025 for new loans and from 1st of March for existing loans
Equity Bank (K) Ltd is the latest lender to announce a reduction in interest rates on all new and existing Kenya Shilling-denominated credit facilities.
The reduced interest rates will comprise a revised Equity Bank Reference Rate (EBRR) of 14.39 per cent plus a margin (based on specific customer risk profile). This 300 basis points (3 per cent) reduction applies to a wide range of credit products, reflecting the bank’s commitment to supporting customers across diverse sectors.
The move follows the recent decision by the Central Bank of Kenya’s Monetary Policy Committee (MPC) to cut the Central Bank Rate (CBR) by 50 basis points to 10.75% from 11.25 per cent and the Cash Reserve Ratio (CRR) by 100 basis points to 3.25 per cent from 4.25 per cent.
In a statement, Equity Bank said the new interest rates are effective February 13th, 2025 for new loans and from 1st of March for existing loans.
“This reduction reflects Equity Bank’s commitment to making credit more affordable and accessible, furthering financial inclusion and stimulating economic activity across Kenya,” it said.
“We understand the financial pressures facing Kenyans today, and we’re committed to doing our part to ease that burden. This rate cut is about more than just lower interest rates; it’s about opening doors for Kenyans to invest in their businesses, support their families, and their livelihoods,” said Moses Nyabanda, Managing Director, Equity Bank (Kenya) Limited.
This is the 3rd time that Equity has reduced its lending rate within the last six months. It had reduced its rate in September and November 2024. Lowering interest rates is expected to have a positive impact on the economy.
By reducing the cost of borrowing, businesses will have access to more affordable credit, lowering operational costs and fostering growth and job creation. For households, lower rates mean reduced loan repayments, increasing disposable income and stimulating consumer spending.
The MPC’s decision, taken at its meeting on February 5, 2025, was based on its observation that the reduction in the CRR will release additional liquidity to banks, which is expected to lower the cost of funds and lending rates, ultimately supporting growth of credit to the private sector. Equity Bank’s rate adjustment aligns with these policy goals, allowing customers to benefit directly from the intended economic stimulus.
As the Kenyan economy evolves, Equity Bank said it remains dedicated to supporting customers’ financial goals and enabling inclusive economic development.
“By passing on the benefits of reduced interest rates, Equity Bank aims to create an environment where businesses can expand, employment opportunities increase, and communities thrive.”
Equity Bank follows Cooperative Bank of Kenya, Kenya Commercial Bank and M-Oriental in adjusting interest rates downwards to allow consumers enjoy the benchmark lending.
On Monday, Cooperative Bank lowered its lending rate from 16.5 per cent to 14.5 per cent and said the adjustment takes effect immediately.
On Tuesday, Kenya Commercial Bank followed suit by adjusting its lending rate from 15.6 per cent to 14.6 per cent.
M-Oriental, on its part, said its lending rate would drop from 16.5 per cent to 16.0 per cent and will take effect from March 1.
