KCB Group has resumed lending on its KCB Mpesa platform after a six-day break that the bank blamed on a technical hitch due to a surge in loan applications.
Customers were unable to borrow on the platform until Wednesday morning, although other services on the platform were available.
KCB says the surge in applications came after the bank’s announcement that the interest rates on the mobile loans would be subjected to a cap of 14 per cent as per the new law on interest rates, causing a system overload.
“Last week we had announced a new rate for our mobile lending platform, and that resulted in a huge demand from customers. Therefore we had to put the system down for the lending function in order to enhance its capacity, although other services such as payment of bills, payment of loans and salary advance were going on,” said KCB chief executive officer Joshua Oigara on Wednesday.
“We saw the highest amount of loan requests in our one and a half years at Sh120 million on Thursday, while we normally we would disburse Sh50 million a day.”
The rate cut effectively brings the monthly rate on KCB M-Pesa loans down to 1.17 per cent. The bank previously charged up to six per cent monthly for the loans.
Since its launch in March 2015, KCB M-Pesa has gained seven million customers and disbursed Sh12 billion in cumulative loans.
The average value of loans per customer is Sh1800, with about 57 per cent of the loans coming under Sh1000.
The bank handles on average 30,000 loan requests daily on the mobile platform amounting to between Sh50 million and Sh100 million, although not all are accepted.