I &M Bank has announced a reduction in its lending interest rates by a total of 0.75% over the past two months. The move follows the Central Bank of Kenya’s (CBK) recent decision to lower the Central Bank Rate (CBR) and aims to increase access to credit for borrowers.

The bank first implemented a 0.25% rate reduction on November 28, 2024, followed by an additional 0.5% reduction effective December 23, 2024. Customers affected by the changes have already been informed.

Impact on Borrowers

The reduced interest rates are expected to make borrowing more affordable for businesses and individuals. For businesses, particularly in the Corporate and SME sectors, the lower rates could reduce borrowing costs, enabling access to working capital and funding for growth.

Individual borrowers stand to benefit from lower costs for personal loans, mortgages, and other credit facilities, potentially easing financial burdens and increasing access to financing.

Bank’s Position on Rate Reduction

I&M Bank noted that the reduction aligns with the broader trend of decreasing interest rates in Kenya, a development it stated could help businesses and households lower operational and financial costs.

“The interest rate reduction will lower operational costs for our customers in the Corporate, SME, and Personal Banking segments to achieve their growth ambitions,” said Gul Khan, CEO of I&M Bank Kenya. He added, “Directionally, interest rates are coming down in Kenya, and this is good news for businesses and consumers.”

Context of the Move

The Central Bank of Kenya’s recent adjustments to the Central Bank Rate (CBR) are part of efforts to stimulate economic activity by reducing the cost of credit. I&M Bank’s decision reflects these policy shifts and aligns with the aim of encouraging borrowing and investment to drive economic growth.

The rate cuts occur at a time when access to affordable credit is essential for economic recovery, particularly for SMEs and households. As lending costs decrease across the banking sector, the reduced rates could contribute to increased borrowing and investment activity in the Kenyan economy.