Interest Rates on Loans to Fall as Banks Bow to CBK Pressure

In Summary

• Commercial banks have begun reducing lending rates following CBK pressure, with expectations that lower borrowing costs will boost economic activity.
• KRA's challenge to collect Ksh48 billion daily highlights the mounting pressure to meet its ambitious target amidst ongoing economic hardships.
• KMPDC is cracking down on fake doctors as concerns grow over misleading medical advice online.
• Dr Magare Gikenyi has filed a lawsuit against KNEC, seeking to halt the July 2025 KCSE exams, citing lack of public participation and violation of students' rights.
• Small businesses in Kenya face fines and loss of banking services if they do not comply with new anti-money laundering regulations requiring disclosure of financial accounts and shareholder details.
• Trump settles with Meta for $25 million over account suspensions, with $22 million earmarked for his presidential library.

Commercial banks have started lowering lending rates for the first time since the Central Bank of Kenya (CBK) began slashing the benchmark rate in August 2024. According to The Business Daily, CBK data shows the average lending rate dropped to 16.89 percent in December from 17.22 percent in November, but the reduction remains small compared to the 1.75 percentage points cut in the central bank rate (CBR). While 23 banks lowered their rates, 14 lenders raised theirs, with Premier Bank increasing by 3.43 percentage points. Standard Chartered Bank remains the cheapest lender among top-tier banks at 15.28 percent, while Absa charges the highest at 18.95 percent. The reduction in loan costs is expected to ease defaults and boost credit uptake, stimulating economic activity.

In a report by The Standard, the Kenya Revenue Authority (KRA) faces a tough task of collecting Ksh2.684 trillion by June, requiring at least Ksh240.17 billion monthly despite economic challenges. By December 2024, KRA had raised Ksh1.243 trillion, a 4.5% growth from the previous year, but a slowdown in GDP growth and lower domestic demand have impacted revenue collection. Customs revenue rose to Ksh429.127 billion, while domestic taxes hit Ksh811.847 billion. Calls for a predictable tax environment are gaining momentum, with KRA Chairman Ndiritu Muriithi questioning the need for annual Finance Bills, citing disruptions to businesses.

The Kenya Medical Practitioners and Dentists Council (KMPDC) has raised concerns over unlicensed individuals posing as doctors online, warning that false medical advice from unqualified sources could lead to misdiagnoses and delayed treatments. The council cited the Medical Practitioners and Dentists Act (CAP 253), which makes it illegal to impersonate a doctor or use the title ‘Dr’ without proper qualifications, with offenders facing fines of up to Ksh5 million, five years in prison, or both. To combat medical fraud, KMPDC has urged the public to verify doctors and health facilities through its online register or USSD platform. Capital business reports that media houses were also advised to fact-check medical sources before publishing health-related content to prevent misinformation.

Small businesses in Kenya now face fines and the risk of losing banking services if they fail to disclose their financial accounts and shareholders under new anti-money laundering rules that came into effect in November 2024. Banks have begun asking MSMEs to provide personal details of their beneficial owners, including names, addresses, PINs, and source of income, as well as their audited accounts or key income and expenses details. Non-compliance could lead to Ksh500,000 fines and daily penalties of Ksh50,000. While small businesses generating less than Ksh50 million in annual sales are exempt from providing audited accounts, they are still required to disclose key financial information. The new rules aim to combat money laundering, with banks under pressure to comply to avoid reputational risks and fines, as reported by The Business Daily.

Dr Magare Gikenyi has sued the Kenya National Examinations Council (KNEC) to stop the planned July 2025 KCSE exams, arguing that they were introduced without public participation. Capital News reports that he claims the changes unfairly create two categories of candidates—one with a shorter preparation period and another with a longer revision time—violating students’ rights under the Constitution. He also argues that the abrupt change goes against the legitimate expectations of learners and parents.

‍The Star reports that US President Donald Trump has reached a legal settlement with Meta, the owner of Facebook and Instagram, that will see the company pay around $25 million (£20 million). The lawsuit stemmed from the suspension of Trump's accounts after the 6 January 2021 Capitol riots. The settlement includes a $22 million contribution to Trump's presidential library, while the remainder will cover legal fees and other plaintiffs. Meta will not admit wrongdoing, and the case follows Meta’s lifting of Trump's account restrictions in July 2024, ahead of the US presidential elections.