The Central Bank of Kenya (CBK) recently reduced the benchmark lending rate to 12.75% from 13%, aiming to stimulate credit uptake. However, many commercial banks have not adjusted their lending rates in response. The Kenya Bankers Association (KBA) noted that the modest 0.25% rate cut might not significantly affect market lending rates. Banks are hesitant to lower rates, citing concerns about economic stability, inflation control, and the modest size of the rate reduction.Moreover, CBK Governor Kamau Thugge emphasized that the reduced rates are in line with global trends, such as anticipated rate cuts in the US. However, banks remain cautious, leading the CBK to summon their CEOs to discuss their reluctance to lower lending rates, despite the central bank’s efforts to create a more favorable lending environment.