This archive report was first published on 6 August 2019.
Published on August 6, 2019, Kenya Commercial Bank (KCB) has increased the interest rate on its mobile loans, leaving many users shocked and concerned.
The bank has raised the KCB M-Pesa rate to 7.5 per cent from 4.08 per cent, affecting users who rely on the platform for instant loans.
"I used to borrow Sh40,000 that I paid back with a Sh1,632 interest, this enabled me to conceal my financial challenges from my colleagues, friends and relatives," said a devastated user.
Under the new terms, borrowers will pay back Sh3,001.60 as interest, a significant increase from the previous rate.
Users have taken to social media to express their concerns, with one user, @beltinah sasi, asking if the new interest rate applies to all users or just new borrowers.
KCB Group responded, stating that the rate increase applies to all users, including defaulters and those on good books.
Mobile loans have become a popular innovation in Kenya, with several banks and lenders offering similar services.
Other mobile lenders, such as CBA's Mshwari and Barclays' Timiza, charge interest rates of 7.5 per cent and 6.17 per cent, respectively.
