If you are looking to take a loan of Sh100,000 with a repayment period of twelve months, you will be charged the highest amount at Sidian Bank. This is according to a report that was published by local business newspaper, Business Daily.
The report, which analyzed the cheapest and most expensive banks to borrow Sh100,000 loan from, found that Sidian Bank has the highest charges amongst formal local lenders. Apparently, the report noted, Sidian Bank charges an interest of Sh16,220 on the loan.
It then adds bank charges amounting to Sh12,400 and also has additional third party costs of Sh2,480. In total, the bank will charge you Sh31,100 for a Sh100,000 loan.
In contrast, the same amount of loan at Habib Bank AG Zurich will cost you Sh12,750 only. Habib Bank AG Zurich was found to be the most affordable place to borrow from. This implies that at this bank, the annual interest rate for the loan is 12.75 percent and the bank doesn’t have additional costs and hidden fees.
On the opposite extreme, Sidian has a 16.22 percent interest rate for the same loan plus additional fees. The difference between the two lenders is Sh18,000, the report in the business newspaper stated.
HF Group was also found to have fairly affordable rates. The lender came second to Habib Bank with total costs of Sh13,000. It was followed by ABC with total costs of Sh14,750 for a Sh100,000 loan.
If a customer borrowed the same amount at Equity Bank for the same number of months, the total costs would be Sh23,785. This placed Equity at position five in the list. The lost showed Equity as being more expensive than Standard Chartered for this amount of loan.
Apart from Sidian Bank, Guardian Bank was the second most expensive lender with total costs of Sh28,050, followed by Access Bank in the third position which had total charges of Sh24,780.
Among the evaluated lenders, the Middle East Bank had the highest interest rate for this loan at 23.98 percent. However, the bank did not issue additional charges and fees. This placed as the fourth most expensive bank to borrow Sh100,000 from.
KCB Group, however, did not appear in the top list rank of cheapest and most expensive banks. The list by Business Daily relied on disclosures that are on the loan comparison portal that is owned and operated by the Kenya Bankers Association (KBA).
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