NCBA Bank Kenya has revised its lending rates upwards in a development that will, effective immediately, see new borrowers start paying more to get credit amid growing struggles on the ability of borrowers to service loans.
In a notice to customers on Monday, the lender said it has increased its base lending rate for shilling-denominated loans to 17.5 percent up from 16.5 percent while the rates for dollar loans will rise to 11.75 percent from 11 percent. Those with existing loans with variable rates will see their repayment costs rise from May 21.
“In view of the ongoing changes in the macroeconomic environment, we wish to inform you that NCBA Bank Kenya’s base lending rates will increase from 16.5 percent per annum to 17.5 percent and from 11 percent to 11.75 percent for Shilling and dollar loans respectively,” said NCBA. “The interest rate on loan facilities priced off the NCBA Bank’s base lending rate will increase by one percent for shillings and by 0.75 percent for US dollars effective May 21, 2024. The new base lending rates take effect immediately for new loan facilities.”
The lender noted that the adjustments will not have any effect on fixed-rate loan facilities. The revision comes two months after Equity Bank effected a similar move in the wake of a new benchmark lending rate announced by the Central Bank of Kenya (CBK) following its February 6 Monetary Policy Committee (MPC) meeting as part of efforts to tame rising inflation and support the shilling.
At the time, the apex bank adjusted the Central Bank Rate (CBR) from 12.5 percent to 13 percent, prompting Equity to revise its cost of new loans to an 18.24 percent rate up from 17.56 percent.
“Following the adjustment of the CBR from 10.5 percent to 12.5 percent in December 2023 and from 12.5 percent to 13 percent in February 2024, Equity Bank wishes to notify our customers and the general public, that the bank shall, effective February 20, 2024, adjust Equity Bank’s Reference Rate (EBRR),” the lender said in a notice at the time.
