CFC, KCB cut interest rates on existing loans
CFC Stanbic Bank and Kenya Commercial Bank Group (KCB) on Wednesday became the first banks to adopt the new interest rates on existing loans.
The announcements came days after Co-operative Bank announced that new loans shall be on the 14.5 per cent interest per annum.
“We have adopted the new lending rate of Base Rate + 400 basis points currently at 14.5% per annum on all new loans & existing facilities,” stated CFC.
Meanwhile, KCB said they will adjust all existing loans to not more than 14.5% as part of the industry commitment to pass these benefits to customers even as they work closely with the Central Bank of Kenya (CBK) on the final regulation.
“Both new and existing loans will enjoy the 14.5% cap on rates and we urge customers to get in touch with their branches from tomorrow (Thursday) to review and amend their banking facilities documents to reflect the new interest rate regime,” said the Group CEO and Managing Director, Mr Joshua Oigara.
The bank also committed itself to ensuring that their services to their customers are not disrupted in any way and also to address any negative impact this may have to the broader economy such as the SME sector and the unbanked population.
In addition, the Bank had also committed 5% of its loan book to support SMEs through the Kenya Bankers Association (KBA) Inuka programme for three years in which women and youth will enjoy 14.5% interest rate once their credit applications are successful.
Kenyan bankers were caught flat-footed last Wednesday when President Uhuru Kenyatta signed into law the Banking (Amendment) Bill that seeks to cap interest rates on loans.
The Kenya Bankers Association on the following day said it was awaiting rules from the State to establish whether those already with loans will be affected by the new interest cap law.