Nipate
Forum => Kenya Discussion => Topic started by: RV Pundit on September 16, 2016, 11:42:01 AM
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This may the shot in arm they need to expand..rather than levying 90% interest per annum.
http://www.businessdailyafrica.com/Corporate-News/KCB-now-caps-interest-on-mobile-based-lending/539550-3383470-xcwyot/index.html
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This may the shot in arm they need to expand..rather than levying 90% interest per annum.
http://www.businessdailyafrica.com/Corporate-News/KCB-now-caps-interest-on-mobile-based-lending/539550-3383470-xcwyot/index.html
Received this from Safcon yesterday:
(http://i.imgur.com/Ehmm0ou.png)
Safcon calls the 7.5% charge a monthly Loan Facility Fee, not interest.
Cheeky buggers.
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:D :D :D There had to be a catch somewhere.
No way these hyenas can offer loans of 1% per month. It is not sustainable.
Safcon calls the 7.5% charge a monthly Loan Facility Fee, not interest.
Cheeky buggers.
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Equitel & KCB are offering at 1.2%. So CBA/Mshwari have to do the same.
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Equitel & KCB are offering at 1.2%. So CBA/Mshwari have to do the same.
This is wonderful. I didn't expect them to cut mobile loans, it has to be cheaper to dispense mobile loans than traditional loan. CBA has no option other than lowering Mshwari fee of 7.5% otherwise they'll be clobbered especially by Equity which is offering loans of up to 1m while Mshwari is about 70k. Equity management bet the future growth on Equitel and it seems like its going to pay off big time. I was sceptical about capping interest rates but I have to admit its working for now. Even 91 T-bills rates keeps going down as banks and insurance company scrabble to buy T-bills that are high yielding.
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Yeah seem to be working. I work in microfinance now and I can tell you repayment rate amongst the poor is 100%. No bank in kenya has ever collapsed due to lending to the poor. Those that fall...are those that lend huge money to one "solid" company. These kind of micro-loans will have very low default rate.
This is wonderful. I didn't expect them to cut mobile loans, it has to be cheaper to dispense mobile loans than traditional loan. CBA has no option other than lowering Mshwari fee of 7.5% otherwise they'll be clobbered especially by Equity which is offering loans of up to 1m while Mshwari is about 70k. Equity management bet the future growth on Equitel and it seems like its going to pay off big time. I was sceptical about capping interest rates but I have to admit its working for now. Even 91 T-bills rates keeps going down as banks and insurance company scrabble to buy T-bills that are high yielding.
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Yeah seem to be working. I work in microfinance now and I can tell you repayment rate amongst the poor is 100%. No bank in kenya has ever collapsed due to lending to the poor. Those that fall...are those that lend huge money to one "solid" company. These kind of micro-loans will have very low default rate.
Kenya now has a lower interest rates for mobile loans than most credit cards rates in America. Most loans in kenya are mini loans of up to 500k, so a lot of people will opt for mobile loans and the impact might be huge.
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Equitel & KCB are offering at 1.2%. So CBA/Mshwari have to do the same.
Yes, I do expect Safcon (CBA) to be forced to change otherwise what's to stop all the other banks offering loans at a 25% pa facilitation fee? :D
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Only in Kenya! :D :D :D :D
M-Shwari loan charge not interest, CBA tells customers
The Commercial Bank of Africa (CBA) says it will not reduce the facilitation fee it charges on M-Shwari as demanded by the Consumers Federation of Kenya (Cofek), saying the charge is not interest and, therefore, does not fall under those affected by the Banking Amendment Act 2016.
Confusion surrounding the law capping bank interest rates, which came into effect on Wednesday, continues, with lenders’ interpretations on the new regulations differing.
Cofek on Thursday gave CBA and Kenya Commercial Bank (KCB) 48 hours to reduce their mobile phone-based loans to a maximum of 14.5 per cent interest rate per year or face legal action.
But while KCB and Equity have since lowered their cost of credit on M-Pesa based loans, CBA, which identifies its charge as a facilitation fee says it is not necessary since it is already lower than the 14.5 per cent as required by the new law.
“There is no interest levied on M-Shwari loans. What we have is a one off facilitation fee of 7.5 per cent charged at disbursement,” Mr Eric Muriuki, the general manager new business ventures at CBA told the Daily Nation. “Furthermore, our loans last only 30 days compared to competing products that have longer tenures,” he said.
CBA’s M-Shwari was the first to be launched in the market in 2012 in partnership with Safaricom’s M-Pesa and currently heads the pack, disbursing at least Sh300 million daily according to data from the bank.
On Thursday, Cofek said whether offered directly or indirectly, any loan whether disbursed through an agent or any other technology, as so long it is from a bank, should not be charged any interest higher that 4 per cent above the Central bank recommended percentage.
http://www.nation.co.ke/business/MShwari-loan-charge-not-interest-CBA-tells-customers/996-3386682-3cgjj5z/index.html
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Central Bank as the regulator should step in but in the meantime let see how KCB and Equitel fair.