Mobile loan subscribers were caught unawares after the Kenya Commercial Bank, KCB, increased interest charged on its mobile loan facility by almost double figures. The bank adjusted the interest rate upwards to 7.05% per month.
“Effective 02 – 08 – 2018, KCB MPesa loan interest rate has been reviewed to 7.05% per month from 4.08 per month,” said the bank on its official Twitter account. This response came after an outcry from customers. “Have you revised the interest on KCB MPESA LOANS?just got a message that my next loan will be charged at 7.5% from the previous 4.03%?,” wrote one Mr Ezeulu; in a request to KCB.
The cost for the 1 month loan has been 4.08% with excise duty applicable on negotiation fees.
KCB now charges an interest rate on its mobile loans that is close to that payable on Mshwari loans; where a one-time fee of 7.5% is levied for each loan. While, Barclay’s Timiza effects an interest rate of 6.17. On their part, Safaricom’s Fuliza loans attract a facility fee of 1.083 percent of the value of the credit. An additional administrative fee of up to Sh30 is charged for each day that the loan remains unpaid. The overdraft facility has a term of 30 days beyond which a borrower is deemed to be in default.