This archive report was first published on 29 September 2021.
Kenyan Business Feed has received a complaint from a client who claims that Faulu Bank has overcharged him on insurance fees. The client, who took his initial loan in June 2019, alleges that the bank deducted an insurance fee of around Sh50,000.
He went for a top-up in March 2021 and again the bank deducted about Sh50,000 of insurance fee. However, unlike other banks such as Equity or KCB, Faulu Bank does not refund the previous insurance fee after a top-up, the client claims.
He has called and followed up severally with the bank but has not received a response. The client has written to the management of Faulu Bank, asking them to clarify where the money goes if it is not refunded.
Meanwhile, Faulu Bank has been performing well financially. In 2020, the lender posted a 73.3 per cent increase in net profit for the year ended December 31, 2020. The bank's profit after tax edged up to Sh330.1 million compared to Sh190.4 million in the same period in 2018.
The bank attributed the strong performance to a 20 per cent increase in interest income, improved operational efficiencies, and growth of its loan book, from Sh19.18 billion in 2018 to Sh21.05 billion in 2019. The bank's non-performing loans ratio improved from 13.07 per cent in December 2018 to 12.1 per cent in December 2019.
Managing Director Apollo Njoroge said, 'We continue to make strategic investments in improving the overall customer experience. A sharp focus on creating value for our customers translated into a strong performance in 2019.'
