By Brian Yatich
Equity Bank has on Wednesday effected their interest rates to 14.5 per cent p.a in line with the new regulation, being the current base rate set and published by the Central Bank of Kenya vide Banking Circular No 4 of 2016 dated 13th September 2016 of 10.5 per cent p.a + 4 per cent.
The adjusted interest rate will apply to all facilities including the “Eazzy Loan” and “Eazzy Plus Loan” products that are channeled through the Equitel mobile platform.
The Bank said that the Equitel loans fell under the Banking (Amendment) Act 2016 and therefore were subjected to the new interest rate loans.
Equity Bank has interpreted “credit facility” to mean any form of financial accommodation extended to a customer through institutions licensed by the Central Bank under the Banking Act irrespective of the various channels,- said Equity Bank in a statement.
The “Eazzy Loan” and “Eazzy Loan Plus” products had an interest rate of between 2 per cent and 10 per cent per month.
The statement added that the new rates applied to any facility provided by an institution that falls under the Banking Act.
“In this regard, Equity Bank has interpreted this to include all credit facilities extended to customers by such institutions. This includes loans through mobile phones or through other third party platforms or collaborations with Mobile Network Operators (MNOs), credit card facilities as well as micro finance loans. The Act in section 33(B) (2) further says “A person shall not enter into an agreement to borrow or lend directly or indirectly at an interest rate in excess of that prescribed by law’,” added the statement.
At the same time Equity Bank added that interest on deposits held in local currency interest earning accounts will earn interest at a minimum of 7.35 per cent being 70 per cent of the current base rate as set by CBK at 10.5 per cent p.a.
“Our suite of deposit accounts will now attract a minimum interest rate of 7.35 per cent p.a. We invite our customers to make full use of these products to build their savings and investments.” equity bank CEO James Mwangi said.
He added that a customer can access emergency loans of up to 90 per cent of their savings.
“With these products now attracting premium interest at a minimum of 7.35 per cent p.a, it gives Kenyans the opportunity to build savings.” Mwangi said.