Equity first to cap interest on mobile lending

Equity becomes the first bank to cap interest on mobile lending

Equity Bank has become the first bank in Kenya to cap interest rates on loans offered through mobile phones or in collaborations with mobile network operators (Equitel), credit card facilities as well as micro finance loans.

The central Bank of Kenya gave banks a deadline of 14th September 2016 to cap rates the maximum interest rates on deposits and maximum rate on loans as a factor of the provided CBR rate. Equity Bank has, with effect from 14th of September 2016 adjusted interest rates to 14.5% p.a with interest on deposits held in local currency interest earning a minimum of 7.35%

Equity Bank CEO Dr. Mwangi said, “As a law abiding institution, Equity Bank has adopted the base rate as set and published by CBK currently at 10.5% and marking up with a 4% cap as provided for by the Law to arrive at 14.5%. The new interest rate will be applied on a reducing balance basis. It will apply to all local currency new credit facilities and existing ones whose performance is on schedule.  We invite our customers to visit their respective branches in case they require more information or clarification on their credit facilities.”

Equity Bank Kenya has over time carved its niche in the market through disruptive distribution channels, digitization, re-positioning the balance sheet and massive social impact investment in the Equity brand.