Mobile loans to be dirty cheap -@1% per month

[RV Pundit]

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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

[Empedocles]

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:



Safcon calls the 7.5% charge a monthly Loan Facility Fee, not interest.

Cheeky buggers.

[Kadudu]

  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.

[RV Pundit]

Equitel & KCB are offering at 1.2%. So CBA/Mshwari have to do the same.

[hk]

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.

[RV Pundit]

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.

[hk]

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.

[Empedocles]

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? 

[Empedocles]

Only in Kenya! 

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 2016http://www.nation.co.ke/business/MShwari-loan-charge-not-interest-CBA-tells-customers/996-3386682-3cgjj5z/index.html

[RV Pundit]

Central Bank as the regulator should step in but in the meantime let see how KCB and Equitel fair.