The Central Bank of Kenya (CBK) has invited public comments on a proposed revision to the Risk-Based Credit Pricing Model, aiming to enhance transparency and ensure lending rates reflect market dynamics.

In a public notice issued on Wednesday, CBK stated, “The Central Bank of Kenya (CBK) announces the issuance of a consultative paper on the Review of the Risk-Based Credit Pricing Model for public comments.”

The revised model proposes using the Central Bank Rate (CBR) as a common benchmark across the banking sector.

Each bank would add a specific premium, referred to as "K", to the CBR to determine its lending rate.

CBK said it would publish each bank’s premium component on its website, the Total Cost of Credit platform, and in two national newspapers.

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First introduced in 2019, the current model was designed jointly by CBK and the banking sector to address opaque credit pricing and excessive loan charges.

CBK said a review is now necessary to assess its relevance and effectiveness five years on.

“Accordingly, CBK requests all interested stakeholders to share their comments... We would appreciate receiving your comments or feedback on or before May 2, 2025,” the notice added.

The regulator’s move signals a continued push towards fairer and more consistent lending practices in the country.