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.

 

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.

 

The President’s name was also drawn into the debate about the bank associated with his family.

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%.

 

 

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