21 May Kenyan banks launch mobile lending service for SMEs
Five Kenyan banks have launched a pilot lending service via mobile phone for the benefit of the country’s small and medium-sized business, the central bank announced on Monday.
KCB Bank Kenya, Commercial Bank of Africa Limited (CBA), Cooperative Bank of Kenya, Diamond Trust Bank and NIC Group are targeting 3,500 SMEs under the new credit-providing service.
The Central Bank of Kenya said the businesses will be offered unsecured loans of between 30,000 and 250,000 Kenyan shillings, with a repayment period of between one and 12 months at an interest rate of 9% per annum.
“Customers will be scored and advised of their credit limit. Additionally, they are eligible for a top-up functionality once 80% of the loan borrowed has been repaid or track record of three months’ repayment,” it said.
The banks hope that the scheme will help push credit through to smaller businesses, after private sector credit growth has remained sluggish since the government capped commercial lending rates at four percentage points above the central bank rate in September 2016.