Co-op Bank Group has announced a significant 2% reduction in its Base Lending Rate from 16.5% to 14.5% per annum in line with recent signals by Central Bank of Kenya.
This reduction takes effect immediately, the bank said today in a statement. “The effective lending rate will be the Base Lending Rate of 14.5% p.a. plus a margin of between 0% p.a. to 4% p.a. based on the individual customer’s credit profile,” it said.
Co-op Bank Group said reduction in lending rates is intended to stimulate credit growth to key sectors of the economy notably the MSMEs that are a critical engine to drive and sustain economic growth.
CBK cut its main interest rate for the fourth meeting in a row on 5th February 2025, hoping to stimulate lending and boost economic growth. The CBK Monetary Policy Committee cut the Central Bank Rate by 50 basis points to 10.75% on a day that it also reduced the Cash Reserve Ratio by 100 basis points to 3.25%. It said it had started on-site inspections of banks to ensure they pass on the benefits of lower funding costs to customers.
“The committee noted that economic growth decelerated in 2024, and therefore there was scope for a further easing of the monetary policy stance to support economic activity, while ensuring exchange rate stability,” it said in a statement.
CBK has been nudging commercial banks to lower interest rates in line with the progressive benchmark rate cuts.
