Equity Bank has seen a rise in the amount of loans that has been borrowed through its mobile phone platform, Equitel.
The bank has loan out Sh. 57 billion through Equitel since launching the product in 2014.
Currently the bank is processing 8 out of every 10 loan requests through Equitel.
According to Equity Bank CEO James Mwangi, the average amount of loans dished out via Equitel has more than doubled from Sh. Sh. 3,900 in June 2015 to Sh. 8,200 in the half-year to June 2017.
“The loan recipient doesn’t need security to be eligible for the loan, (and) the loan limits are based on your banking behaviour and credit history,” he says.
Equity mobile loans start from Sh100 to Sh3 million and are charged the capped interest rate of 14 per cent per annum, or 1.16 per cent per month – with repayment period limited to 12 months.
On average, Equitel processes 8,500 loans daily, according to data for the half-year to June 2017. Loan applicants are also charged an appraisal fee calculated at five cent of the loan amount.
Typical loans borrowed via mobile were repaid in three months compared to 4.5 months in June 2016, the lender said.