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Bank loan interest rates in Kenya: CBK data for September 2026

The average rate Kenyan banks charged on loans, month by month, from the Central Bank of Kenya, and how KESONIA now sets your rate.

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by Reviewed by Michael Mwangi 6 min read Updated 25 October 2026Verified 25 Oct 2026

Kenyan banks charged an average of 14.40% on loans in September 2026, according to the Central Bank of Kenya. That is 0.41 percentage points down from 14.81% in January 2026. It is an average across all banks and all loan types, so your own rate can be higher or lower.

Average bank rates in 2026, month by month

MonthLendingOverdraftDepositSavings
September 202614.40%13.00%6.94%3.53%
August 202614.34%12.50%6.91%3.54%
July 202614.39%12.97%6.93%3.53%
June 202614.38%12.98%6.84%3.32%
May 202614.50%12.93%6.80%3.23%
April 202614.69%13.29%6.88%3.31%
March 202614.70%13.04%6.86%3.22%
February 202614.78%13.31%see notesee note
January 202614.81%13.56%7.03%3.18%

Source: CBK, Commercial Banks Weighted Average Rates, read 25 October 2026. CBK's table lists February 2026 twice with different deposit and savings figures; the lending and overdraft figures are the same in both rows, so we show those and leave the other two cells out.

What the average does and does not tell you

The weighted average is the rate across the whole banking sector, weighted by how much each bank lent. It is useful for seeing which way rates are moving. It is not a quote. A salaried borrower with a check-off arrangement, a business overdraft and an unsecured personal loan can all sit at very different rates in the same bank.

CBK's Monetary Policy Committee, in its press release after the meeting of 7 October 2026, gave the same 14.40% figure for September 2026 and kept the Central Bank Rate at 8.75%.

What KESONIA is

KESONIA is the Kenya Shilling Overnight Interbank Average: the average interest rate at which banks in Kenya lend and borrow unsecured shillings to each other overnight. CBK says it is not a new rate. It is the old overnight interbank average, renamed, with the same method: a volume-weighted average of actual overnight deals.

CBK runs it. It began publishing KESONIA and a KESONIA Compounded Index on 1 September 2025, and posts both by 9.00am each business day for the previous day. On 22 October 2026 CBK showed KESONIA at 8.7502%.

How a bank sets your loan rate now

Under CBK's Revised Risk-Based Credit Pricing Model (August 2025), the rate on a variable-rate shilling loan is:

KESONIA + a premium (“K”)

The premium is set by each bank. CBK says it may include:

  • the bank's operating costs for lending,
  • a return to shareholders, and
  • your own risk premium, worked out from the bank's credit scoring of you as a borrower.

On top of the rate come fees: CBK lists origination, arrangement, commitment, default and late payment fees, which must be disclosed to you. So the total cost of credit is KESONIA plus K plus fees. KESONIA is applied compounded in arrears over each interest period, which means the rate on a variable loan follows the market as it moves rather than waiting for a review date.

The KESONIA dates, from CBK

  • 1 September 2025: CBK starts publishing KESONIA and the KESONIA Compounded Index.
  • 1 September 2025: the revised model takes effect for all new variable-rate loans, according to CBK's KESONIA FAQ.
  • 28 February 2026: existing variable-rate loans move over, at the end of a six-month transition.

Not covered: fixed-rate loans and foreign currency loans. If KESONIA is not available for a period, the Central Bank Rate is the fallback. Your bank's own notice tells you the date your loan moved.

Rates bank by bank

CBK publishes each bank's average lending rate in separate releases titled Commercial Banks Average Lending Rates, on its bank supervision and banking sector reports page. When we checked on 25 October 2026, the newest release listed there was December 2023, and we could not find a 2026 bank-by-bank file on CBK's site. We do not publish per-bank figures copied from news sites. When CBK posts a current file, it goes here.

Before you take a bank loan

Frequently asked questions

What is the average bank lending rate in Kenya now?

14.40% in September 2026, the latest month on the Central Bank of Kenya's weighted average rates table when we checked on 25 October 2026. It was 14.81% in January 2026.

What is KESONIA?

KESONIA stands for Kenya Shilling Overnight Interbank Average. It is the average rate at which Kenyan banks lend each other unsecured shillings overnight. CBK calculates and publishes it every business day, and it is now the base rate for variable-rate bank loans.

When did KESONIA start applying to bank loans?

CBK's KESONIA page says the revised pricing model took effect on 1 September 2025 for new variable-rate loans, and on 28 February 2026 for existing variable-rate loans, after a six-month transition.

Does KESONIA apply to every loan?

No. CBK says it applies to variable-rate loans. Fixed-rate loans and foreign currency loans are outside it. Where KESONIA is not practical, the Central Bank Rate can be used as the alternative reference rate.

Which bank has the cheapest loans in Kenya?

CBK publishes bank-by-bank average lending rates in separate releases. The newest one on CBK's own reports page when we checked was December 2023, so we do not publish a per-bank ranking. For a current quote, ask the bank for the total cost of credit on your own loan, in writing.

Sources

  1. Central Bank of Kenya, Commercial Banks Weighted Average Rates (%), read 25 October 2026.
  2. Central Bank of Kenya, KESONIA page and FAQ, read 25 October 2026.
  3. Central Bank of Kenya, Revised Risk-Based Credit Pricing Model, August 2025.
  4. Central Bank of Kenya, MPC Press Release, meeting of 7 October 2026.
  5. Central Bank of Kenya, bank supervision and banking sector reports (Commercial Banks Average Lending Rates releases), read 25 October 2026.

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