Equity Bank Kenya has announced a second reduction on its loan interest rates, following the Central Bank of Kenya’s recent decision to lower the benchmark interest rate. The move is expected to provide financial relief for borrowers and stimulate economic activity amid challenging economic conditions.
The bank was pleased to announce a reduction in interest rates on all new and existing Kenya Shilling-denominated credit facilities, following the recent decision by the Central Bank of Kenya’s Monetary Policy Committee (MPC) to cut the Central Bank Rate (CBR) from 12.75% to 12.0%.
“The reduction in our Equity Bank Reference Rate (EBRR) from 17.83% to 17.39% is in response to the MPC’s decision, which aims to maintain economic stability amid improving inflation trends and favorable economic indicators. said Dr James Mwangi, Equity Group Managing Director and CEO.
This announcement follows an MPC meeting held on 8th October 2024, where the Committee highlighted an improved global economic outlook, continued easing of inflation in advanced economies, and a favorable domestic environment with stable food and fuel prices. These factors contributed to the reduction of the CBR to 12.0%, an action aimed at bolstering economic activity while maintaining exchange rate stability.
“With this reduction, all new and existing customers with Kenya Shilling-denominated loans will benefit from lower borrowing costs, providing immediate relief and supporting their financial aspirations. Equity Bank remains committed to broadening access to affordable credit, thereby empowering small businesses, entrepreneurs, and individuals to participate in Kenya’s growth journey.” Mwangi added
The reduction, effective 18th November 2024, reflects Equity Bank’s proactive commitment to making credit more affordable and accessible to a wider range of customers, furthering financial inclusion and stimulating economic activity across Kenya. This is the 2nd time that Equity Bank Kenya limited has reduced its Loan Interest Rates within the last six months. It had reduced its rate in September 2024.
For households, the lower interest rates will mean reduced borrowing costs, an increase in disposable income and providing families with more finance. This additional income can stimulate consumer spending, further driving economic growth. Overall, this change aligns with the government efforts to bolster the country’s economy by making both business and personal finance more accessible and sustainable.
Dr. Mwangi, speaking during the release of Equity Group’s Q3 2024 financial results at an investor briefing last week, stated that the interest rate reduction reflects the bank’s proactive commitment to making credit more affordable and accessible. This initiative aims to enhance financial inclusion and stimulate economic activity across Kenya.
The adjustment highlights the banking sector’s crucial role in aligning financial services with economic policies, as lower borrowing costs are expected to drive investments and boost consumer spending key drivers of Kenya’s economic recovery.
The reduction is particularly significant for micro, small, and medium enterprises (MSMEs), which form the backbone of Kenya’s economy. Many of these businesses, previously strained by high borrowing costs, are expected to benefit from reduced financial pressures.
Equity Bank has positioned itself as a leader in supporting MSMEs, providing tailored financial products and advisory services. This move further cements its role as a partner in fostering economic resilience and job creation.
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