CBK clears all banks for risk-based loans models

Loan default

The KBA says interest rates backed by CBK-approved risk-based lending models would equate to charges approved by the exchequer.

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The Central Bank of Kenya (CBK) has cleared all 38 banks’ risk-based pricing models, allowing lenders to price loans differently based on a borrower's likelihood of default.

The regulator's nod clears the way for all institutions to implement their respective interest rate-setting models even as some banks refine their models on specific lending niches.

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