Tuesday, January 31, 2023

Equity Bank to stop giving salary loans

Equity Bank is set to stop giving out salary loans under its docket for unsecured and micro loans.

This is a move that is expected to affect salaried workers and owners of small businesses.

According to Kenya’s Business Daily, the bank says its latest move is aimed at complying with a new set of global accounting rules on loan loss covers.

The new guidelines – which are technically referred to as International Financial Reporting Standard (IFRS) 9 – are meant to come into force on January 1, 2018.

“We are moving away from unsecured lending. IFRS 9 requires you to use historical ratio to make provisions at point of booking the loan. This is not sustainable with a margin of seven per cent,” Equity CEO James Mwangi was quoted by Business Daily.

Equity has traditionally focused on micro-enterprises and low-income earners to grow volumes. Equity’s change in strategy defies the segments that helped transform the former building society into one of Kenya’s biggest lenders.

Did you love the story? You can also share YOUR story and get it published on Bizna Click here to get started.

Connect With Us

309,518FansLike
14,135FollowersFollow
7,983FollowersFollow
1,480SubscribersSubscribe

Latest

How confident do you feel about the Kenyan economy in 2023?

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Related

error: Content is protected !!