Co-operative Bank has become the first lender to drop its mobile loans facilitation fee in the country.
This has seen the bank issue better prospects for borrowers compared to rivals Equity Bank, Commercial Bank of Africa (CBA) and KCB who are charging one off facilitation fees for loans applied on their mobile platforms.
“We shall not levy any fees or other transactions charges, only interest that is compliant with the new law and pro-rated with the number of months,” Co-op Bank said in a statement. Interestingly, this move will see borrowers who take Co-op’s mobile loans avoid the 10 per cent excise duty fee charged on appraisal fees.
Currently, CBA is charging a fee of 7.5 per cent for its M-Shwari loans and has stated that it will not reduce it. Equity Bank is charging a one per cent appraisal fee while KCB is charging 2.25 per cent fee dubbed as negotiation fee.
Borrowers at Co-op Bank can borrow up to Sh. 200, 000 through its secured loan option. They can also borrow a maximum of Sh. 50,000 for a business loan at 1.2 per cent monthly. Customers who take these two loans will have a one-month repayment period.
However, Co-op Bank has a three month period loan issue which includes salary advances. These loans are issued at 1.16 per cent and have a cap of upto Sh. 100,000.
