Sidian Bank (formerly K-Rep) Bank is the first lender to put its feet on the gas pedal by adjusting up the price of its loans.
This follows the scrapping of the rate cap law, which opens the door for commercial banks to freely set the price of their loan facilities.
In an internal memo dated 8th November 2019 to all employees of Sidian Bank and signed by its Chief Executive Chege Thumbi, the lender announced new loan rates. Corporates loans will now be charged at 16 per cent, SME loan (17 per cent), Consumer loans (19per cent), Microloans/unsecured loans (19 per cent), Credit Cards (19 per cent) and Mobile Loans (19 per cent).
The memo states that these rates are to be effected immediately for any new loans while the price of already existing ones, is to be communicated later.
“Following the signing of the Finance Bill into law by the President, which among other provisions repeals Section 33B of the Banking Act that provides for the capping of bank interest rates, the bank has reviewed interest rates for various products based on the associated credit risk,” said Thumbi.
On Saturday, November 9, the Bank’s board Chairman James Mworia issued a statement saying the board of directors and management regret the “unfortunate” issuance of the statement on the review of interest rates.