Banks Lower Lending Rates.

Njuguna Ndung'u - Central banks Govoner.

Kenyan banks have cut their base lending rates after Central Bank of Kenya (CBK) reduced its benchmark lending rate by 3.5 percentage points to 13 per cent last week.

Barclays Kenya base lending dropped by 1.5 percentage points to 19.5 per cent and this will be effective from October 1 according to an advert in the dailies and on their website.

The bank had lowered its base rate in July to 21 down from 22.5 per cent immediately after the Monetary Policy Committee made this year’s first cut of the policy rate, also called the Central Bank Rate to 16.5 from 18 per cent.

Ecobank's new base rate is 21.5 per cent, 3.5 percentage points down, exactly by the same margin that the MPC reduced the CBR to put it at 13 per cent in the second such cut this year effective from the 15th of October.

Mortgage lender Housing Finance has lowered its rates by the highest margin of five percentage points to 18 per cent, making home buying cheaper.

He Kenya commercial bank (KCB) revised its base rate for normal loans from 22 per cent to 19 per cent while cutting that of mortgages to 18 per cent rate from the previous 19 per cent.  This is effective from the 1st of October.

CFC Stanbic bank is not left behind as it lowered its rate from 2.5 per cent to 19 per cent effective from October 15.

Last week’s by the Central Bank was a signal for commercial banks to ease the cost of borrowing.

While announcing the monetary policy committee’s decision, CBK Governor Njuguna Ndung’u noted that interest rate still remained high, an indication that the cost reductions is yet to be fully transferred to bank customers and the economy at large.

This is good news especially to entrepreneurs who feared the high rates. The economy is slowly picking up according to an Economist and Sstock market analyst - Aly Khan Satchu in one of his articles.

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