Ranked the largest bank by assets, the top-tier lender says KCB M-Pesa loans will be charged a rate of 1.2 per cent monthly and deposits will earn 7.35 per cent per annum.
“All KCB loans are subject to the new laws and the bank is already compliant including mobile loans,” KCB said in a statement.
Equity Bank boss James Mwangi did not reveal the cost of the lender’s mobile loans, but only said they will be capped at 14.5 per cent per annum as provided in a new law which took effect on Wednesday.
The Consumers Federation of Kenya yesterday gave lenders offering mobile-based credit a 48-hour notice to cut the interest rate payable on such loans to a maximum of 14.5 per cent per annum or face court action.
Focus now shifts to Commercial Bank of Africa’s M-Shwari which is charging a one-off 7.5 per cent loan processing fee and Co-op Bank’s MCo-op Cash which also charges a fee of 10 per cent for a monthly loan, 12 per cent for a three-month facility and seven per cent for its monthly business loan and secured personal loan.
The Banking (Amendment) Act 2016, which commenced on Wednesday, sets the ceiling for lending rates at four percentage points above the benchmark rate, and sets the floor for deposit rates at 70 per cent above the base rate.