How Kenyan banks are pricing their loans

Customers being served at Family Bank Tower branch in Nairobi. PHOTO | SALATON NJAU | NMG

Since 2014, Kenyan banks have been using the annual percentage rate (APR) pricing mechanism to show borrowers how much their loans will cost, including charges and interest.

It has not always been like this, however. Previously, the lenders were regularly criticised over ‘hidden charges’ on loans that were included in the fine print of contracts, whose disclosure was only available to those savvy enough to ask.

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Note: The results are not exact but very close to the actual.