Kenyans on Twitter have turned their guns on M-Shwari following CBK’s directive on interest rates
Following the amendment of the Banking Act that was signed into law by President Kenyatta and subsequently set interest rates at 14.5% for most banks, Kenyans now want M-Shwari to follow suit by reducing the amount of interest charged on lenders.
M-Shwari is a loan product by Commercial Bank of Africa developed for Safaricom Customers. Those calling for a deduction of the rates claim that the M-Shwari loan work the same way as bank loans and should thus be treated as such.
— gathara (@gathara) September 20, 2016
In a statement to Consumer Federation of Kenya, the Bank says that they do not charge interest on the loans given to Safaricom customers except for a 7.5% facilitation fees. This was after the consumer protection body wrote to them seeking them to comply with the banking regulations.
There is no interest levied on M-Shwari loans. What we have is a one off facilitation fee of 7.5 per cent charged at disbursement.”
Furthermore, our loans last only 30 days compared to competing products that have longer tenures. – Mr Eric Muriuki, the general manager new business ventures at CBA.
Kenyans on Twitter are however not amused with this response.
#CutMshwariInterestRate your loans have a very short repayment period and tough penalties like CRB listings. Mmekula nyama sana.
— lexon siro (@lexonsiro) September 20, 2016
The President’s name was also drawn into the debate about the bank associated with his family.
— COFEK, Kenya (@ConsumersKenya) September 20, 2016
KCB and Equity already adjusted their mobile based loans to a maximum of 14.5% per annum interest rate. The interest rate on M-Shwari loans currently stands at 7.5% per month which when calculated per annum is way above the CBK ceiling of 14.5%.