Deputy President Kithure Kindiki has announced that banks will reduce their base lending rates again in March 2025, continuing a trend that started last year.
Kenyan banks have been lowering their lending rates after the Central Bank of Kenya (CBK) cut its base lending rate for the fourth time this month, aiming to stimulate lending to the private sector.
According to Kindiki, these rate cuts will push banks to seek out Kenyans to offer loans.
“These interest rates you have seen Equity Bank, Cooperative Bank, and KCB reducing by between 2 and 3 percent, next month they will go down again,” Kindiki said Tuesday during a consultative forum with Meru County leaders at his Karen residence.
The Deputy President explained that banks have been hesitant to lend to businesses because the government has been borrowing from them.
However, with the government no longer borrowing from banks, Kindiki believes financial institutions will be forced to seek customers and offer credit, much like they did during President Mwai Kibaki’s administration.
“Banks were not lending businesses money because the government was borrowing that money now we are not borrowing that money so the banks will be forced to come and look for customers to give credit the way it was during the first years of President Mwai Kibaki’s administration,” said Kindiki.
