KCB hikes loan interest rates for its KCB M-Pesa account

The bank’s payment options included: a one month loan at four percent per month, a three month loan at three percent per month and a six month loan at two percent per month.

KCB, though, through a text message, sent to its KCB M-Pesa account customers, informed clients that changes would be happening to these rates with effect from today – October 26.

“Dear customer, effective October 26, 2015 (today), new loans on KCB M-Pesa will attract monthly loan interest of six per cent for one month, five per cent for three months and four per cent for six months,” the text read.

KCB M-Pesa is a product of KCB Group in partnership with Safaricom. The KCB M-Pesa account allows customers on the M-Pesa platform to borrow instantly from KCB without saving. The loan limits range from Kshs 50 to Kshs 1,000,000.

Upon further enquiry from M-Pesa customer care, CIO East Africa was informed that existing loans would not be affected by this change, only ones that are taken on and after October 26.

And as the reason for why this changes were being implemented by the bank, the M-Pesa customer representative said: “From time to time, KCB reviews its pricing for its lending product offerings upwards or downwards based on prevailing market conditions. The current review has been necessitated by the prevailing tight market liquidity in Kenya.”