Nairobi, July 29 -- Towards the end of last year, the Central Bank of Kenya (CBK) rolled out a major policy reform on loan pricing, switching interest rate pricing to a credit risk-based pricing (RBP) framework anchored on the Kenya Shilling Overnight Interbank Average Rate (Kesonia) and a bank-specific "K" factor.

Institutions that were unable to model Kesonia were allowed to continue using the Central Bank Rate (CBR), which is more static and generally less advantageous to banks. The actual transition dates were September 2025 for all new variable-rate loans and February 2026 for existing variable-rate loans.

Analysis of Credit Reference Bureau (CRB) data submitted by banks suggests that the reform has achieved its intended objectives...