The Central Bank of Kenya (CBK) data reveals that small lenders like First Community Bank (FCB), Ecobank of Kenya, and HF Bank offer lower interest rates.
Overall, the FCB had the lowest rate at 9%, while the Credit Bank had the highest at 17.6%
Other banks like Middle East Bank and Sidian also had relatively high rates. Absa and Equity Bank Kenya are ranked sixth and seventh, with interest rates averaging 14.2 percent and 14.1 percent respectively.
While running the Kenya Bankers Association’s cost of credit calculator, ABSA Bank proved to be the most expensive, charging 14.3% for a 1.0 million loan over a year, while Bank of Baroda was the cheapest, charging 6.1% for the same loan purely as interest charges.
This data highlights the varying cost of credit among different banks in Kenya.
Cheapest banks in Kenya, as of March 2023
These were the banks with the cheapest rates in Kenya, according to CBK data:
| Bank name | Interest rates for loans |
|---|---|
| First Community Bank | 9% |
| Ecobank | 10.7% |
| Housing Finance Company of Kenya, (HFC) | 11% |
| Access Bank | 11.2% |
| Consolidated Bank | 11.6% |
| Habib Bank | 11.9% |
| Diamond Trust Bank, (DTB) | 12.1% |
| Citibank | 12.2% |
| KCB | 12.3% |
| Standard Chartered | 12.3% |
Top 10 most expensive banks in Kenya
Now for the most expensive creditors in the country, these 10 topped the list:
| Bank name | Interest rates for loans |
|---|---|
| Credit Bank | 17.6% |
| Middle East Bank | 16% |
| Sidian Bank | 14.9% |
| CIB | 14.7% |
| Victoria Commercial Bank | 14.5% |
| Absa Bank | 14.2% |
| Equity Bank | 14.1% |
| M-Oriental | 14% |
| Kingdom Bank | 13.8% |
| SBM Bank | 13.7% |
The figures above are basic rates and do not take into consideration factors such as:
- Legal fees
- Negotiation fees
- Insurance, etc.
Given that these can drastically impact the effective cost of servicing your loans, the rates above, thus, don’t tell the whole story, but can be the basis upon which you may begin your search for affordable commercial credit facilities in the country.
Cost of borrowing Kshs 1,000,000 across banks in Kenya.
For these results, we used the Cost of Credit calculator, with the following parameters:
- Loan amount: KES 1,000,000
- Duration: 1 year
- Number of repayments: 12 (once every month)
Here are the interest rates you would expect from a few of the banks above:
| Annual Percentage Rate | Total Bank charges | Monthly Repayment | Annual Percentage Rrate | Total Cost of Credit | Total Repayment Amount |
|---|---|---|---|---|---|
| Absa bank | KES 24,000 | KES 91,918 | 23.21% | KES 127,017 | KES 1,127,017 |
| ABC Bank | KES 8,050 | KES 89,317 | 14.54% | KES 79,857 | KES 1,079,857 |
| DTB | KES 24,000 | KES 89,317 | 17.65% | KES 95,807 | KES 1,095,807 |
| Ecobank | KES 46,050 | KES 89,613 | 22.71% | KES 121,407 | KES 1,121,407 |
| Equity Bank | KES 36,250 | KES 89,317 | 20.08% | KES 108,057 | KES 1,108,057 |
| KCB Bank | KES 35,400 | KES 89,317 | 19.91% | KES 107,207 | KES 1,107,207 |
| Co-operative Bank | KES 36,340 | KES 91,680 | 25.19% | KES 136,500 | KES 1,136,500 |
| Bank of India | KES 12,000 | KES 89,317 | 15.3% | KES 83,807 | KES 1,083,807 |
