CBA drives down cost of loans with KBRR pricing

Commercial Bank of Africa (CBA) will from tomorrow (Wednesday) price both new and existing loans at 12.9 per cent per annum, having opted to use a different pricing formula in compliance with the new law that sets the floor for deposits and caps lending rates at a maximum four percentage points above the base rate.

The mid-sized lender has opted to calculate the applicable lending rates using the Kenya Bank Reference Rate (KBRR) – which currently stands at 8.9 per cent – as the base rate in a move that is expected to stir fresh competition among the lenders.