This archive report was first published on 13 May 2020.
As the COVID-19 pandemic continues to disrupt economies, many borrowers have found themselves struggling to repay their loans. In response, Mwananchi Credit has launched a new loan product, Switch and Save, designed to provide relief to borrowers in need.
According to Mwananchi Credit CEO Dennis Mombo, the Switch and Save loan product enables customers to transfer their credit facility to the company, which takes it up under more favourable terms. This allows borrowers to enjoy a 10% cash back on repayments, which is then used to top up their loan repayment.
Additionally, Switch and Save customers are allowed to pay back interest only for three months to allow them time to reorganize their finances. This is a significant relief for borrowers who have been hit by the economic disruption caused by the pandemic.
As Mombo explains, Mwananchi Credit is intervening to reset the secured loans to the original status, charging lower interest than the previous lenders. This gives borrowers not only breathing space but also access to more cash.
"We have customized loans on a case-by-case basis," Mombo says. "If, say, a civil servant is serving a Ksh1 million loan and paying Ksh10,000 per month, we can take up the loan and reset it back to Ksh1 million under easy-to-manage terms."
Mwananchi Credit is reaching out to clients to understand their financial situations and find a mutual solution for genuine cases. As Mombo notes, "It's not good to maximize profit on the misfortunes of people like everyone is doing. For us, it's time to give back to our customers. If we help them today, they will support us in future."
