Equity Bank Set to Lower Interest Rates Following CBK Rate Cut

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Equity Bank Limited has announced plans to lower its loan interest rates following the Central Bank of Kenya’s (CBK) recent move to reduce the benchmark rate from 12.75% to 12.00% in October.

The bank, led by Group CEO Dr. James Mwangi, is set to implement this change within the next week, aiming to make borrowing more affordable and stimulate economic growth.

Dr. Mwangi highlighted that Equity Bank’s move aligns closely with the government’s objectives to enhance credit access for businesses and individuals.

“We are proud that among Tier 1 banks, we now offer the most affordable interest rates in Kenya. We made the choice to stand by our customers by absorbing costs rather than passing them on. As we look to the future, we are committed to easing the burden on households and businesses,” said Mwangi.

“Within the next few days, we’ll announce our second interest rate reduction to encourage loan uptake. We are keen to support the government to stimulate the economy and drive sustainable growth.” Dr. Mwangi added.

Mwangi emphasized that the bank’s focus remains on enhancing credit access and reducing financial strain on borrowers.

“We are excited about what CBK is doing by lowering its interest rates. Previously, when Treasury bonds were offering 17% to 18%, they crowded out the private sector and the financial sector. With the lowered rates, we expect more funding to flow into the private sector, and we plan to reduce our rates further within the next week.” noted Mwangi.

Read: Equity Bank Hits Ksh 1 Billion Mark in Pre-Tax Profits from Its Insurance Business in Q3 2024

In October, the Monetary Policy Committee (MPC) lowered the Central Bank Rate (CBR) from 12.75% to 12.00%, intending to stimulate economic activity in light of decreasing inflation. This followed an earlier rate reduction in August, when the CBR was adjusted from 13% to 12.75%.

In September, Equity was one of the first banks to respond to the CBR cut, reducing its reference rate from 18.24% to 17.83% in a move designed to boost credit uptake amid challenging economic conditions.

Dr. Mwangi also urged the CBK to consider additional rate cuts before the end of the year. “We hope to see further reductions to stimulate credit uptake,” he stated, signaling the need for continued monetary easing to support households and businesses.