Kenya Commercial Bank (KCB) has signed a deal with CIC Insurance to manage Sh1 billion staff loan portfolio to allow the insurer concentrate on core business.
The deal will see over 500 CIC employees offered loan facilities at below market rate of six per cent per year on reducing balance to acquire properties such as houses and cars.
KCB, fresh from launching its property centre, will also take over existing mortgages and car loans held by CIC staff and offer it under its own car and mortgage scheme. “We are partnering with someone whose core competence is to manage loan portfolio to ensure they are properly collateralised.
We would like our staff to seamlessly access credit,” said CIC Group CEO Tom Gitogo. According to KCB Group CEO Joshua Oigara, CIC staff will also have a chance to access up to 35 per cent discount on building materials, especially that the bank already has contracts with parties such as motor-dealers and housing contractors.
The insurer hopes to ride on KCB expertise to manage risk of default to ensure that their financial statements enjoy solid assets as they concentrate on core business.
“Since we are outsourcing the portfolio, we will not make any provision against the loan portfolio because KCB will be able to take corrective measures during application process,” explained Mr Gitogo.
