KCB Group has revised its interest charges on Mpesa mobile loans from 4.08 percent per month to 7.5 percent per month. The charge includes excise duty.
The new rates took effect on 2 August 2019. As a result, new disbursements will be subjected to the revised interest rates.
Increasing the interest rates on mobile loans might lead to a spike in KCB’s revenues. According to the bank’s first-quarter results, the lender issued KSh434.3 billion in loans where KSh33.8 billion accounted for mobile loans. Their mobile loans grew by 270 percent from 2018 quarter one disbursements of KSh9.2 billion to KSh33.8 billion in 2019’s first quarter.
At the moment, loans to individuals and households represent a larger portion of KCB’s total lending, contributing up to 36% of the group’s loan book.
KCB is one of the biggest banks in Kenya, with branches 258 branches in 7 countries including Kenya, Uganda, Tanzania, South Sudan, Rwanda, Burundi, and Ethiopia.
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