Equity Bank has introduced additional fees on top of the 14 per cent maximum interest rate that banks are allowed to charge. The bank has also reduced the number of loans it is processing on its mobile platform, even though it was the first bank to announce that it will be implementing the new laws.
In its updated terms and conditions on the one-month Eazzy Loan disbursed on the mobile phone, the lender says it will charge the interest rate as set out in the Banking Act, comprising the Central Bank Rate (CBR) plus a margin of four per cent.
“The CBR currently being 10 per cent per annum, the effective interest rate is thus 14 per cent per annum. This rate is subject to change as stipulated by law,” Equity says in the statement posted on its website. But to get the mobile loan, customers will now have to part with a loan appraisal fee on fresh application of one per cent of the loan amount recoverable upfront.
In case the loan is rolled over, it will attract another 1 per cent of the amount outstanding at the point of roll over. Eazzy Loan customers will also have to bear a 10 per cent excise duty on the Loan Appraisal Fee recoverable upfront. This may push up the actual loan to over 16 per cent.
