Existing and new borrowers at Co-operative Bank of Kenya will enjoy a lower lending rate following the decision by the lender to slash its base lending rate.
The lender has announced that with immediate effect its lending rate are set to reduce by 2%.
Co-op Bank becomes the first lender to reduce its lending rate in line with the Central Bank of Kenya’s move last week to cut the benchmark lending rate to 10.75% and the Cash Reserve Ratio from 4.25% to 3.25%.
Co-op Bank Group Managing Director Gideon Muriuki, says the lender’s decision to reduce “lending rates is intended to stimulate credit growth to key sectors of the economy notably the MSMEs that are a critical engine to drive and sustain economic growth.”
The reduction in lending rates comes at a time when households and businesses are grappling with the high cost of living
“Co-op Bank Group is pleased to announce a significant 2% reduction in our Base Lending Rate from 16.5% p.a. to 14.5% p.a,” said Co-op Bank Group Managing Director Gideon Muriuki.
However, individual borrowers will be charged different lending rate dependant on their borrowing and repayment history.
“The effective lending rate will be the Base Lending Rate of 14.5% p.a. plus a margin of between 0% p.a. to 4% p.a. based on the individual customer’s credit profile,” said Muriuki.
The reduction in the base lending rate by Co-operative Bank is expected to trigger similar moves by the banking industry with lenders likely to follow suit in coming days.