2014-07-10

Banking Circular No 4 of 2013 - Issuance of Prudential Guielines on Incidental Business Activities and Non-Operating Holding Companies

In 2014, the Central Bank of Kenya introduced the Kenya Banks' Reference Rate (KBRR) as a transparent credit pricing framework. This framework is extended to microfinance banks and set at 9.13% initially, effective from July 8th, 2014. The purpose of this circular is to operationalize the KBRR by having all microfinance banks price their flexible-rate loans using it as the base rate. Furthermore, individual banks will charge customers an interest rate equal to the KBRR plus 'K', with 'K' being any deviation from the reference rate. The Central Bank will work closely with stakeholders to facilitate a smooth and effective implementation of this new framework.

Kenya

Central Bank of Kenya

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