Are you thinking about taking out a loan in Kenya? You’re not alone.
Many Kenyans are navigating the complex world of bank loans. Let’s break down the current state of loan interest rates in Kenya’s banking sector, according to the latest CBK reports.
Kenya’s banks offer a wide range of interest rates for long-term loans. Most major lenders charge between 13% and 18%.
The big players: How do they stack up?
Co-operative Bank leads the pack
Co-op Bank, one of Kenya’s top-tier banks, is keeping things competitive. Here’s what they offer:
- Personal loans: 15.54%
- Business loans: 16.14%
- Corporate loans: 15.63%
These rates are pretty attractive compared to some other big banks.
KCB Bank and Equity Bank
KCB Bank’s rates are a bit higher than Co-op’s. Equity Bank sits somewhere in the middle.
KCB
- Personal loans: 18.24%
- Business loans: 18.06%
- Corporate loans: 13.50%
Equity Bank
- Personal loans: 16.93%
- Business loans: 18.02%
- Corporate loans: 16.74%
It’s always good to shop around and compare!
Bargain hunters, take note!
If you’re looking for the lowest rates possible, two banks stand out:
1) Premier Bank
2) Middle East Bank (K) Ltd
These banks offer rates as low as 9% and 10.84% respectively. That’s quite a deal!
Most expensive banks in Kenya
On the flip side, some banks charge much higher rates. SBM Bank and Guaranty Trust Bank top the list with rates up to 21.29%. Ouch!
- SBM Bank: 21.29%
- Guaranty Trust Bank: 21%
CBK Banks weighted lending rates
| Loan Category | Personal | Business | CORPORATE | OVERALL RATES | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Loan Maturity | |||||||||||
| Banks | Overdraft | 1-5 Years | Over 5 years | Overdraft | 1-5 Years | Over 5 years | Overdraft | 1-5 Years | Over 5 years | ||
| 1 | Premier Bank Kenya Limited | – | 9.0 | 9.0 | – | 9.0 | 9.0 | – | 9.0 | 9.00 | 9.00 |
| 2 | Access Bank (Kenya) PLC | 11.31 | 11.31 | – | 11.33 | 11.30 | – | 11.30 | 11.45 | 11.25 | 11.37 |
| 3 | Diamond Trust Bank Kenya Limited | 12.03 | 11.41 | 12.25 | 12.40 | 12.40 | 12.18 | 12.44 | 12.35 | 12.87 | 12.39 |
| 4 | Consolidated Bank of Kenya Limited | 13.40 | 12.80 | 13.60 | 13.00 | 13.00 | 14.00 | 13.00 | 14.00 | 14.00 | 13.39 |
| 5 | Kingdom Bank Limited | 14.72 | 13.00 | 13.15 | 15.83 | 15.46 | 12.81 | 14.00 | 14.50 | 14.50 | 14.02 |
| 6 | Guardian Bank Limited | 14.04 | 14.26 | 15.38 | 5.80 | 14.17 | 15.99 | 11.06 | 15.73 | 16.18 | 14.67 |
| 7 | Ecobank Kenya Limited | 4.75 | 11.06 | 14.34 | 10.44 | 14.36 | 17.61 | 4.65 | 19.23 | 20.73 | 14.72 |
| 8 | Bank of India | 15.10 | 15.00 | 15.05 | 15.00 | 14.95 | 15.00 | 14.85 | 14.95 | 15.00 | 14,94 |
| 9 | Co-operative Bank of Kenya Limited | 13.00 | 15.54 | 15.37 | 12.42 | 16.14 | 16.75 | 16.24 | 15.63 | 11.38 | 15.18 |
| 10 | Paramount Bank Limited | 16.50 | 17.44 | 16.30 | 16.70 | 16.48 | 20.40 | 12.30 | 15.68 | 15.80 | 15.35 |
| 11 | Habib Bank A.G Zurich | 14.75 | 19.23 | 19.50 | 15.14 | 20.00 | – | 14.54 | 16.86 | 15.17 | 15.38 |
| 12 | UBA Kenya Bank Limited | 3.83 | 13.00 | 18.67 | 18.28 | – | – | 18.42 | 13.00 | – | 15.55 |
| 13 | Gulf African Bank Limited | 13.71 | 14.60 | 14.39 | 16.03 | 16.51 | 16.90 | 15.17 | 16.25 | 16.06 | 15.68 |
| 14 | Equity Bank Kenya Limited | 12.20 | 16.93 | 14.06 | 14.41 | 18.02 | 16.96 | 19.55 | 16.74 | 13.88 | 16.02 |
| 15 | Family Bank Limited | 16.97 | 17.92 | 14.34 | 16.71 | 17.94 | 17.15 | 17.10 | 17.55 | 15.45 | 16.13 |
| 16 | National Bank of Kenya Limited | 16.00 | 17.00 | 17.00 | 15.00 | 18.00 | 18.00 | 16.00 | 16.00 | 17.00 | 16.82 |
| 17 | DIB Bank Kenya Limited | – | 15.42 | 17.80 | – | 17.10 | 16.31 | 18.26 | 15.32 | 16.78 | 16.27 |
| 18 | KCB Bank Kenya Limited | 17.37 | 18.24 | 16.28 | 17.31 | 18.06 | 16.77 | 16.58 | 13.50 | 17.21 | 16.40 |
| 19 | Development Bank of Kenya Limited | 14.06 | 17.84 | 15.84 | – | – | – | 16.54 | 16.56 | 16,77 | 16.46 |
| 20 | Guaranty Trust Bank (K) Ltd | 17.51 | 20.77 | 21.00 | 16.21 | 19.68 | – | 18.21 | 15,74 | 16.53 | 16.85 |
| 21 | Prime Bank Limited | 16.56 | 16.71 | 16.81 | 16.48 | 17.24 | – | 16.96 | 16.80 | 16.77 | 16.85 |
| 22 | Standard Chartered Bank Kenya Limited | 13.58 | 19.23 | 17.89 | 12.60 | 12.19 | 16.97 | 17.55 | 20.09 | 18.52 | 17.32 |
| 23 | African Banking Corporation Limited | 14.15 | 17.18 | 16.55 | 16.72 | 16.55 | 18.79 | 18.03 | 17.35 | 17,74 | 17.19 |
| 24 | Stanbic Bank Kenya Limited | 14.98 | 19.78 | 17.31 | 17.23 | 19.90 | 18.89 | 13.71 | 19.55 | 19.58 | 17.49 |
| 25 | M-Oriental Bank Limited | 18.75 | 16.95 | – | 16.93 | 18.36 | 18.78 | 17.42 | 18.86 | – | 17.58 |
| 26 | Bank of Baroda (Kenya) Limited | 17.75 | 17.80 | 17.64 | 17.72 | 17.73 | 17.70 | 17.75 | 17.74 | 17.71 | 17.73 |
| 27 | Citibank N.A Kenya | – | – | – | – | – | – | 18.24 | 18.93 | 15.86 | 17.98 |
| 28 | I&M Bank Limited | 16.84 | 20.78 | 17.93 | 17.26 | 19.83 | 18.56 | 17.98 | 18.52 | 17.51 | 18.48 |
| 29 | Bank of Africa Kenya Limited | 17.80 | 19.82 | 19.31 | 19.51 | 18.95 | 19.13 | 16.69 | 17.76 | 18.59 | 18,51 |
| 30 | Victoria Commercial Bank PLC | 18.06 | 18.83 | 16.59 | 19.81 | 19.26 | – | 19.05 | 18.42 | 18.81 | 18.75 |
| 31 | NCBA Bank Kenya PLC | 21.03 | 21.14 | 18.27 | 20.76 | 21.96 | 20.80 | 18.18 | 17.81 | 18.00 | 19.12 |
| 32 | Commercial International Bank (CIB) Kenya Limited | 18.79 | 20.57 | 19.01 | 20.01 | 22.32 | – | 18.86 | 19.39 | 18.04 | 19.20 |
| 33 | Sidian Bank Limited | 17.68 | 20.58 | 15.99 | 18.92 | 20.29 | 20.19 | 18.06 | 19.92 | 19.32 | 19.74 |
| 34 | ABSA Bank Kenya PLC | 14.69 | 21.19 | 19.94 | 21.95 | 20.82 | 19.76 | 20.45 | 18.82 | 19.63 | 19.82 |
| 35 | SBM Bank Kenya Limited | 16.40 | 21.82 | 21.79 | 17.15 | 19.11 | 21.33 | 19.27 | 20.88 | 19.15 | 19.91 |
| 36 | HFC Limited | 21.94 | 20.42 | 19.29 | – | – | 21.55 | 20.61 | 20.98 | 20.12 | |
| 37 | Credit Bank PLC | 19.61 | 23.22 | 19.17 | 22.05 | 19.60 | 15.00 | 19.10 | 23.67 | 13.00 | 20.32 |
| 38 | Middle East Bank (K) Limited | 24.36 | 21.44 | 10.84 | 20.47 | 20.70 | 27.00 | 22.28 | 20.38 | 22.12 | 20.96 |
Breaking it down: Different loans, different rates
Personal loans
Looking for a personal loan? Here’s some good news:
“Diamond Trust Bank (DTB) offers the most attractive rate at 12.25%, followed by Equity Bank at 14.06%.”
Business loans
If you’re a business owner, pay attention:
- KCB Bank leads with the lowest rate of 16.77%
- Standard Chartered and Equity Bank follow closely behind
Corporate lending
For big businesses, Co-op Bank shines again with a competitive rate of 11.38%. Only DTB offers a lower rate in this category.
But beware: Stanbic, NCBA, and SBM Bank charge the highest rates for corporate loans, all exceeding 19%.
A closer look at Co-op Bank
Co-op Bank made headlines in 2023 by keeping its rates low, even when other banks were raising theirs. Why? They credit their success to:
- Strong loan repayment records
- Lower default risks, thanks to their target check-off scheme loans
What’s next for Kenya’s banking sector?
Experts predict continued growth in interest income. Cytonn Investments forecasts a 29.8% growth in the first quarter of 2024. This growth is driven by:
- Persistently high borrowing costs
- New risk-based lending models
Risk-based lending: A game-changer?
As of May 2023, 33 out of 39 banks in Kenya had their risk-based lending models approved by the Central Bank of Kenya (CBK). But what does this mean for you?
- Banks can now price risk more effectively
- They can expand their loan books
- It’s potentially easier for small businesses to get loans
These new models don’t just rely on credit bureau scores. They take a more nuanced approach to assess your creditworthiness.
The bottom line
Choosing a bank loan in Kenya requires careful consideration. Rates vary widely, and what works for one person might not work for another. Take your time, compare options, and don’t be afraid to ask questions. Your financial future is worth the effort!
Remember, whether you’re an individual, a small business owner, or a corporate executive, there’s a loan out there for you. Happy borrowing!
