Savings and Credit Co-operatives (Saccos) in the country have reduced their interest rates.
Coast-based Bandari Sacco said it had reduced its rates to price its loans below the rate cap, but did not disclose previous rates.
“With effect from 1st November, 2016, all new loans will attract reduced rates. Back office (Bosa) loans are set at 12 per cent per annum, emergency loans 10 per cent per annum, school fees loans (8 per annum), Front Office (Fosa) loans (12 per cent per annum), Fixed deposits 10 per cent per annum,” said the sacco.
Mwalimu Sacco, touted as the largest in the country with 60,000 members has also announced cuts.
“We are pleased to update all our customers that we have revised our interest rates on our Bosa, Fosa and Business loans. These new rates come into effect on 1st October, 2016 and will apply to both existing and new loans,” it said in a notice.
Mwalimu, however, remains above the 14 per cent rate cap, with its Fosa’s 24-month advance loan product coming down from 24 per cent to 18 per cent. It has lowered its Fosa 12-month advance from 18 per cent to 15 per cent and its business loan for individuals from 17 per cent to 15 per cent.
Nakuru County-based Cosmopolitan Sacco that primarily caters for savings and credit needs of teachers in the county has also reviewed its rates.
“Enjoy reduced rates on Fosa advance at 13 per cent per annum effective immediately,” said Cosmopolitan in a notice. The advance earlier attracted an interest of 15 per cent per annum.
Kenya has over 5,000 registered saccos that have mobilised savings to the tune of Sh501 billion and built an asset base of Sh694 billion.
An estimated 230 saccos offer Fosas through over 550 outlets, enabling them to compete effectively with banks for retail banking business and lend non-members.