Equity Bank (Kenya) Ltd has announced a reduction in interest rates for all new and existing Kenya Shilling-denominated credit facilities. This move follows the Central Bank of Kenya’s (CBK) recent decision to lower the Central Bank Rate (CBR) from 12.75 per cent to 12.0 per cent.
The new rates, effective Monday, November 18, 2024, include a revised Equity Bank Reference Rate (EBRR) of 17.39 per cent, down from 17.83 per cent, with an additional margin capped at a maximum of 8.5 per cent per annum. “This reduction reflects our commitment to making credit more affordable and accessible, empowering businesses and households, and driving Kenya’s economic growth,” said Dr. James Mwangi, Equity Group Managing Director and CEO.
Dr Mwangi highlighted the bank’s proactive stance during the release of the group’s Q3 2024 financial results. He emphasized that reduced borrowing costs would enable businesses to access affordable credit, lower operational expenses, and foster enterprise growth, ultimately leading to job creation.
For households, lower interest rates translate to reduced borrowing costs, increased disposable income, and greater financial flexibility. This additional spending capacity is expected to stimulate consumer demand, further boosting economic activity.
The rate adjustment aligns with the government’s broader efforts to strengthen the economy through affordable and sustainable financial solutions. The Monetary Policy Committee (MPC), during its meeting on October 8, 2024, cited improving global economic conditions, easing inflationary pressures in advanced economies, and a favourable domestic environment as key factors for the CBR reduction. The policy change aims to support economic activity while ensuring exchange rate stability.
Equity Bank’s rate cut reflects these objectives, offering customers immediate relief and fostering financial inclusion for small businesses, entrepreneurs, and individuals across Kenya.
Equity Group’s Q3 2024 financial results underscore its robust performance:
- Deposits: Grew by 9% year-on-year to Ksh 1.3 trillion.
- Customer Base: Increased to Ksh 21.3 million.
- Liquidity Position: Strengthened to 55% with Ksh 295.5 billion in cash and equivalents and Ksh 468.1 billion in investment securities.
- Shareholders’ Funds: Rose by 17% to Ksh 227 billion, boosting the Group’s ability to support private-sector initiatives under its Africa Resilience and Recovery Plan (ARRP).
This is Equity Bank’s second rate reduction in six months, having previously adjusted rates in September 2024. The move is expected to not only benefit its customers but also catalyze economic growth across diverse sectors.
As Kenya continues to experience favourable economic conditions, Equity Bank’s proactive response underscores its role in driving financial inclusion and supporting national economic stability.
