Following KBA's announcement yesterday on lowering the lending rate CFC Stanbic Bank, which is part of the Standard Bank Group, announced plans to drop its lending rate from 24% to 22.5% in August. It has joined the ranks of Barclays and Bank of Baroda which intend to lower their respective lending rates to 21%.

The move is likely to attract potential investors. The new lending rates will, however, depend on a customer’s financial situation. According to Fred Opondo, a Market Analyst at the NSE, banks determine the actual lending rate "by looking at the borrower’s risk factor." If someone has a strong base of financial security, then they will most likely to benefit from a reduction in lending rates. Likewise, first time borrowers may have to pay more interest on a loan in spite of the bank’s official rate.

The bank’s audited results for the year ended 31^st December 2011 report a jump in profit after tax from Ksh1.7 billion to Ksh1.8 billion the previous year. It has a market capitalization of more than Ksh 11.7 billion. CFC Stanbic’s decision follows the CBK’s move to lower its own rate by 1.5% last week.