Governor Dr Kamau Thugge said the Central Bank of Kenya’s next reform wave will focus on three pillars: improving how monetary policy translates into commercial loan rates, raising banks’ minimum capital requirements and building a fast, interoperable retail payments infrastructure.

The new credit‑pricing framework will replace the varied reference rates used by lenders with a common benchmark – the Kenyan Shilling Overnight Interbank Average (KSONIA) – combined with each bank’s operating costs and the borrower’s risk profile.

Thugge noted that KSONIA and the Central Bank Rate (CBR) are now virtually identical at about 8.75%, meaning changes in the policy rate should be mirrored promptly in interbank rates and, ultimately, in loan pricing.

To strengthen banks’ resilience, CBK has increased the minimum capital floor from KSh1 billion to KSh10 billion, with the original deadline set for 2029.

The Treasury has pushed to extend the final KSh10 billion deadline to December 2032, a point of disagreement highlighted by TechTrendsKE, while 14 banks were reported below the KSh5 billion threshold at the end of June 2026.

CBK is also collaborating with the Kenya Bankers Association on an electronic collateral registry to simplify the transfer of secured loans when borrowers switch banks, reducing administrative and legal costs.

On the payments front, the central bank aims to finalise a fast, interoperable retail payments system that would link Kenya’s digital payments ecosystem with the East African Community and potentially other African markets.

The proposed National Payment System Bill 2026 would broaden CBK’s supervisory powers over payment service providers, replacing the 2011 framework and giving the regulator authority to inspect, access records and intervene where needed.

Thugge also highlighted the role of artificial intelligence, noting that CBK has identified nearly 300 AI use cases across 14 departments, including machine‑learning models for inflation forecasting and satellite‑derived economic indicators.