- Loans that were given through M-Shwari went down by 14.3 percent to sh47.5 billion while KCB M-Pesa loan reduced by 60.1 percent to sh27.3 billion.
- Digital loan platforms like Fuliza that is under KCB and NCBA, charges 1.083 percent interest and daily fees saw it surge by 33.1 percent to sh149.4 billion due to a slow approval process.
Due to the six month freeze from listing loan defaulters with the Credit Reference Bureaus, CRB, different banks in the country reported that there was reduced motivation of customers to repay loans owed.
Equity Bank, KCB Group, and NCBA mentioned that due to this they have decided to slow down all digital loans in order to avoid more defaulters since the relief from CRB listing that ensued in early April to late September upon the wake of the coronavirus pandemic.
Joshua Oigara, KCB chief executive officer, mentioned that” the bank would give out Ksh. 10 billion per month as loans but since the freeze, the amount was reduced to below sh5 billion.”
Oigara explained further that it was a difficult measure that led to a reduction in lending as the level of giving loans rose from 2 percent to 15 percent in the middle of the year.
Also Read: – FORMER NAIVASHA MP LOSSES LAND TO JAMII BORA BANK FOR AUCTIONING TO SETTLE OUTSTANDING SH 21.7 MILLION DEBT
“The step was to consider customer and businesses from the effects of covid-19 and to cushion distress in such environment of a pandemic,” said Equity Bank Chief Executive Officer James Mwangi.
Mr. Mwangi said that caution was taken and the rules tightened as a measure to improve lending and to increase the chances of only giving loans to creditworthy clients.
Loans that were given through M-Shwari went down by 14.3 percent to sh47.5 billion while KCB M-Pesa loan reduced by 60.1 percent to sh27.3 billion.
Digital loan platforms like Fuliza that is under KCB and NCBA, charges 1.083 percent interest and daily fees saw it surge by 33.1 percent to sh149.4 billion due to a slow approval process.
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