2014-07-09

Banking Circular No 4 of 2014 - Operationalization of Kenya Banks\' Reference Rate (KBRR)

In January 2014, a committee led by the Cabinet Secretary for National Treasury recommended introducing the Kenya Banks' Reference Rate (KBRR) to enhance private sector credit and mortgage finance supply in Kenya. Effective from July 8th, 2014, the KBRR was set at 9.13 percent. This circular operationalizes the new reference rate: banks and mortgage finance companies must base their flexible-rate loans on this rate as their foundation. Banks should vary their lending rates close to the KBRR. All new and existing flexible credit facilities will transition to the new framework by June 2015. The Central Bank of Kenya will collaborate with institutions, stakeholders, and the public for a smooth and efficient implementation.

Kenya

Central Bank of Kenya

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