The Co-operative Bank has introduced overdraft mobile loans. The new mobile loans dubbed Kamilisha will allow customers to overdraw their accounts by up to Sh100,000.
According to the bank, the new Kamilisha overdraft mobile loans will allow customers including individuals and businesses to complete their transactions even after their accounts run out of funds. The transactions that will be catered for will include sending of money, paying of bills such as electricity, water and rent, and even making investments such as buying stocks.
“The [Kamilisha overdraft mobile loans] service allows you to complete transactions when you don’t have enough money in your bank account,” the bank said in a message to customers. “It bridges the short-fall between what you have and what you need to pay, helping you complete important transactions instantly.”
Repayment for the borrowed amount will be due within 30 days from the first time the facility is used. The funds taken by a customer will be automatically recovered from subsequent inflows into the customer’s bank account.
Co-op Bank states that it will review an individual customer’s banking activity to determine their limit.
“We review your account transactions, salary deposits, or business turnover to determine what you qualify for. To increase your limit, maintain active account usage and repay your Kamilisha balance on time,” states Co-op Bank.
This new product has emerged as the most affordable when compared to its closest rivals such as Equity’s Boostika and Safaricom’s Fuliza.
A breakdown of charges and fees shows that for Sh1,000, a customer will be charged Sh20 in access fees, Sh4 in excise duty, Sh0.34 in insurance fees, and Sh2 daily charge. This means that in a month, the total cost of this amount will be Sh84.34.
In contrast, the same amount taken over the same period on Boostika attracts a charge of Sh85. On Fuliza, the costs are even higher at Sh6 per day, translating to Sh180 for an amount of Sh1,000 taken for a duration of one month.
To use this facility, customers shall be required to:
- Log in to the bank’s digital banking platform that is accessible via USSD or the bank’s mobile banking app
- Select E-loans > Select Kamilisha
- Select Opt-in
- Read and accept these Terms and Conditions
- Confirm Opt-in
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