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Wednesday, May 27, 2020

Kenyans to take loans at highs of 16 per cent, says Joshua Oigara

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Cost of Loans in Kenya: KCB Chief Executive Officer Joshua Oigara has announced that risky borrowers will start taking loans from as high as 16 per cent. These risky borrowers who have been previously denied credit by banks include individuals and small businesses.

Mr. Oigara predicts that interest rate at KCB will increase to between 15 percent and 16 percent, up from the current 13 percent.

“Banks are ready to lend. So we are going to see more people including SMEs start accessing credit in the industry. Customers with high-risk profiles may see a 2-3 per cent increase. We are not going to see a massive change. As a leader in the industry, we don’t see an opportunity to go back to the old behaviour of high rates,” Mr Oigara said in a statement yesterday.

Cost of Loans in Kenya

Mr. Oigara ruled out lending at highs of 20 to 30 per cent as was previously the case before the introduction of interest rates in 2015. The regime of the 20 percent interest rate is long gone. The macroeconomic and business environment where we are today does not at all support an environment of high rates,” he said.

Oigara was speaking during the launching of Stawi, a mobile loan app that is being spearheaded by the Central Bank of Kenya. The app will see banks come together to offer credit to borrowers. Borrowers will be able to take credit of between Sh. 30,000 and Sh. 250,000. The bank that have signed up include KCB, Co-op Bank, NCBA (NIC & CBA), and DTB. Eq

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