Equity Group Announce New Loan Rates

Equity Bank (K) Ltd has announced a reduction in interest rates on all new and existing Kenya Shilling-denominated credit facilities, effective November 18, 2024.

The decision follows the Central Bank of Kenya’s Monetary Policy Committee (MPC) reduction of the Central Bank Rate (CBR) from 12.75% to 12.0%.

This rate cut underscores Equity Bank’s commitment to making credit more affordable and accessible, fostering financial inclusion, and stimulating economic activity across Kenya. Notably, this marks the second reduction in lending rates by Equity Bank within the last six months, following a similar adjustment in September 2024.

The updated interest rates will now feature a revised Equity Bank Reference Rate (EBRR) of 17.39%, with a maximum margin capped at 8.5% per annum. This adjustment applies to a variety of credit products, reflecting the bank’s dedication to supporting customers across diverse sectors.

Dr. James Mwangi, Managing Director and CEO of Equity Group, stated, “The reduction in our EBRR from 17.83% to 17.39% is a direct response to the MPC’s decision, which aims to maintain economic stability amid improving inflation trends and favorable economic indicators. With this reduction, all customers with Kenya Shilling-denominated loans will benefit from lower borrowing costs, providing immediate relief and supporting their financial aspirations. Equity Bank remains committed to broadening access to affordable credit, empowering small businesses, entrepreneurs, and individuals to participate in Kenya’s growth journey.”

Dr. Mwangi highlighted the significance of lowering interest rates during the release of Equity Group’s Q3 2024 financial results in an investor briefing last week. The reduction in borrowing costs is expected to benefit businesses by enabling access to more affordable credit, thereby lowering operational expenses. This financial relief not only supports economic activities but also encourages enterprise growth and job creation.

For households, the reduced interest rates will lead to lower borrowing costs and increased disposable income, stimulating consumer spending and further driving economic growth. This change aligns with government efforts to enhance the economy by making both business and personal finance more accessible and sustainable.

The MPC meeting on October 8, 2024, noted an improved global economic outlook, easing inflation in advanced economies, and a favorable domestic environment characterized by stable food and fuel prices. These factors contributed to the CBR reduction to 12.0%, aimed at bolstering economic activity while maintaining exchange rate stability.

Equity Bank’s proactive adjustment of its rates aligns with these policy objectives, allowing customers to benefit directly from a stable economic environment.

In its recent performance report, Equity Group announced a 9% year-on-year growth in deposits, reaching Kshs. 1.3 trillion, with a customer base of 21.3 million. This growth has led to a 12% increase in cash and cash equivalents to Kshs. 295.5 billion and a 5% rise in investment securities to Kshs. 468.1 billion, resulting in a robust liquidity position of 55%. The bank also reported strong capital buffers, with a core capital ratio of 15.9% and a total capital ratio of 18.3%, significantly above the regulatory thresholds. Shareholders’ funds grew by 17% to Kshs. 227.0 billion, enhancing the Group’s capacity to support businesses and households in line with its private sector-led Africa Resilience and Recovery Plan (ARRP).