Only 10 of 37 Kenyan Banks Adopt Kesonia Benchmark as Most Hold to CBR

Only 10 of Kenya’s 37 commercial banks have adopted the Kesonia benchmark, leaving 27 banks tied to the Central Bank Rate.

Kesonia is the Kenya Shilling Overnight Interbank Average, designed to sit within a ±75‑basis‑point corridor around the CBR to increase loan‑rate transparency. Banks may use either Kesonia or the CBR as their reference rate for new variable loans.

Twenty‑seven of the 37 banks continue to price loans off the CBR, which the Central Bank of Kenya held at 8.75 % after pausing its rate‑cut cycle on April 8 due to rising global energy prices from the Iran conflict. Dr Samuel Tiriongo of the Kenya Bankers Association said the switch to Kesonia required more time to recalibrate systems, making the CBR the easier immediate choice.

Market reaction shows limited price impact: Equity Bank (EQTY.N) traded at KES 45.20, up 0.8 % today with a market cap of roughly KES 150 billion; KCB Group (KCB.N) stood at KES 38.10, flat, cap near KES 120 billion; Absa Bank Kenya (ABSA.N) rose 0.5 % to KES 12.40, cap about KES 45 billion.

The low Kesonia uptake means most borrowers still see rates anchored to the CBR, slowing the promised transparency and potential cost reductions from the new risk‑based model. Analysts note that without wider adoption, the interest‑rate corridor will see limited movement, keeping spreads narrow.

Watch for banks’ recalibration timelines and any signal from the CBK that could trigger a broader shift to Kesonia later in 2026.