Standard Chartered Bank has set Sh. 10 billion to be given as unsecured loans.
This move comes at a time when local banks have been shying away from issuing unsecured loans.
StanChart says it has done its homework in terms of risk appraisal, giving it the confidence to issue up to Sh7 million to each borrower in the 45-day period running up to October 11.
“In the past one year there was a remarkable slowdown in lending to the retail segment as we adjusted to the rate-cap regime,” StanChart’s CEO Lamin Manjang said in a statement.
“During the period we have put in a lot of work in segmenting our customers and identifying their credit needs.”
Borrowers will enjoy a one-month repayment holiday before the bank effects loan deductions. The offer is available to salaried individuals and can be repaid over a period of up to six years.
A customer borrowing the maximum Sh7 million over the six-year period will incur a total cost of credit of Sh3.57 million according to www.cost-of-credit.com, a website created by the Kenya Bankers Association (KBA) to improve transparency in the lending market.
The cost includes monthly repayments of Sh144,240 and one-off charges amounting to Sh192,500. StanChart says it expects most of the loans will fund purchases of real estate and cars.
