KCB Bank Announces New Interest Pricing for Existing Loans- What it Means

KCB Bank has announced changes to how interest on existing loans will be calculated, following the implementation of a revised Risk-Based Credit Pricing Model (RBCPM) in line with directives from the Central Bank of Kenya (CBK).

In a notice dated Wednesday, January 28, 2026, the lender said the new pricing framework, which has been in use for new loan facilities since December 1, 2025, will now be extended to cover existing Kenya Shilling-denominated variable-rate loans.

“We hereby notify all customers with running local currency loan contracts that were issued on or before November 30, 2025, that the new RBCPM will be applied to any portion of their facilities that remain outstanding as at February 28, 2026,” read part of the notice.

KCB Announces Changes on How Interest on Existing Loans Will be Calculated

According to KCB, the revised model will apply to any portion of existing local currency loan facilities that remain outstanding as of February 28, 2026. The changes will officially take effect from March 1, 2026.

Under the new system, loan interest will be calculated using a common reference rate, that is, the Central Bank Rate (CBR), plus a customer-specific risk premium, known as “K”. The premium reflects the borrower’s risk profile as assessed at the time of the original loan application.

At the same time, KCB clarified that while interest rates for existing loans will be adjusted using the CBR plus the risk premium, current borrowers will not be subjected to additional fees and charges associated with the revised model.

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Bank Assures Existing Customers of No New Charges Under Revised Credit Model

Such fees, including origination, processing, negotiation, and commitment fees, will only apply to new facilities issued from December 1, 2025, as approved by the CBK.

“Existing customers will not be subject to the fees and charges component of the revised RBCPM, which applies only to new facilities,” said the Bank.

The bank further noted that the total cost of credit will be fully disclosed to customers, in compliance with CBK requirements, to allow borrowers to understand clearly how their loan pricing is determined.

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KCB further advised customers seeking clarification on how the changes may affect their loans to contact their relationship managers, visit any KCB branch, or reach out through the bank’s contact centre.

“For any consultations, please contact us through your Relationship Manager, the contact center at +254711087000, or any of our branches across the country,” said the Bank.

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