A deepening rift between the Central Bank of Kenya (CBK) and the country’s commercial banks is threatening to reshape how Kenyans access credit and raising tough questions about trust in the financial system.
At the center of the storm is a bold move by the CBK to abandon the Risk-Based Credit Pricing Model (RBCPM), a framework introduced with much fanfare in 2019 but now criticized for fueling high lending rates and murky pricing practices. Banks have been given until May 2 to respond to the CBK’s sweeping reforms, but the mood across the industry suggests deep unease.
Governor Kamau Thugge has defended the shift as necessary to fix a broken model that, according to regulators, has been gamed by some lenders through hidden charges and excessive rates. Rather than providing fairness and clarity, the RBCPM often left borrowers guessing and paying more than they should.
Yet for banks, the sudden push for a market-driven pricing system reopens old wounds about regulatory uncertainty and market risks. Some institutions fear that without robust protections, they could be left exposed to rising defaults.
Meanwhile, for millions of Kenyans struggling to access affordable credit, the brewing battle threatens to widen a trust gap that has been growing for years. Many borrowers already feel alienated by a system they view as favoring profits over people.
“The model was supposed to protect us, but loans just became more expensive,” said Martin Otieno, a small business owner in Kisumu. “Now they are arguing again and we are the ones who suffer.”
As the May deadline looms, the real question isn’t just about how loans will be priced. It’s about whether Kenya’s financial system can rebuild confidence among the very people it is meant to serve.
