Kenyans have been crying about the cost of credit. Now, the Central Bank of Kenya (CBK) has delivered a firm message: no more games. Governor Dr. Kamau Thugge has told banks to immediately roll out the new Kenya Shilling Overnight Interbank Average (KESONIA) as the common reference rate for all variable loans.

For years, borrowers have suffered under vague, manipulated formulas that gave banks cover to charge whatever they pleased. KESONIA ends that era. Every loan—except those in foreign currencies—will now be benchmarked on one transparent reference rate. If the CBK cuts policy rates, banks will have no excuse but to cut lending rates.

“There will be no excuse for banks. Once we lower the policy rate, banks should also lower interest rates,” Dr. Thugge warned.

Kenya Bankers Association Chairman and KCB Group CEO Paul Russo echoed this call, insisting that the new model is about trust. “We don’t just want transparency; we want lending to grow. For that, banks must move with CBK to restore confidence,” he said.

KBA CEO Raimond Molenje added that clear and consistent loan pricing is critical to businesses, especially MSMEs, which fuel the economy. By embracing KESONIA, banks won’t just clean up their image—they will channel credit more effectively to the entrepreneurs and producers that keep Kenya alive.

The announcement came at the KBA 14th Annual Banking Research Conference, themed “Banking and Economic Growth Dynamics.” The gathering of regulators, CEOs, and researchers put a spotlight on fixing a broken system that has, for too long, favored banks over Kenyans.

The future of credit in Kenya is now clear: transparency is no longer a choice—it’s the law of survival. Banks that cling to old tricks risk being left behind by customers who demand fairness.