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KCB Bank has enhanced the capacity of its flagship mobile platform KCB MPESA, cut interest rates and resumed lending on the product, effectively boosting the lender’s financial technology agenda.
KCB Group CEO and MD Joshua Oigara said the adjustment on the product which was occasioned by a technical hitch which hit the platform last week affecting disbursement of loans, was meant to guarantee better services and enhance security.
“We took the initiative to disengage the KCB MPESA system in order to undertake a quality assurance exercise as well as optimal development of the system to better serve our 7 million customers. This will enable them enjoy a seamless interactive experience while transacting on KCB MPESA. We apologize to our customers for the inconveniences that this caused” he said adding while KCB M-PESA lending service was unavailable, the rest of the KCB mobile services (Mobi Loan, Kopa Bills, Salary Advance & Mobi Grow) were available.
“The system review now allows the Bank to accommodate more loan requests. We have also enhanced the credit scoring model as our way of deepening uptake of financial services,” said Mr Oigara while announcing that the Bank has resumed lending on the platform.
Since the launch of KCB MPESA in March last year, KCB has extended financial services to over 7million customers, disbursing at least Ksh12billion in loans. The average value of loans per customer averages Ksh1800.
Following the enactment of the Banking (Amendment) Act 2016 which came into effect mid this month—effectively capping interest rates at not more than 4 per cent of the Central Bank rate—KCB has lowered rates on all its loans to 14 per cent. KCB MPESA loans will now be charged 1.16% per month, down from 6% previously. A one off negotiation fee of 2.5% will also be applied to loan applications. Excise duty (tax) is applicable on the non interest rate fees / negotiation fees, as required by law.
“We have seen a sharp rise in loan requests on all our mobile loans following the decrease in interest rates, meaning the platform remains central in further deepening the financial inclusion agenda,” said Mr Oigara.
As one of the pioneering mobile loan services in East Africa, KCB MPESA is a revolutionary mobile solution to the unbanked, enhancing the financial inclusion agenda of the bank. Latest statistics show that at least 40% of the loans processed through KCB MPESA are below Ksh 500 and 57% are below Ksh 1000, an indicator that the service is providing affordable finance to users across all income levels.
“Mobile banking, which is a key lever of our digital banking agenda, remains crucial to our growth story in the coming years. From a collaboration perspective, KCB MPESA is a flagship partnership that is redefining the mobile payments space in Kenya,” said Mr Oigara.
KCB MPESA, as a mobile-based account, is accessible by all M-PESA users. Through their mobile phones, over 19 million active M-PESA customers in Kenya are able to access instant micro loans from as low as Ksh 50 to Ksh 1 million for a period of one month. One does not need to be a KCB Bank customer to enjoy the KCB MPESA service.
Anyone can access the KCB MPESA menu through the Safaricom SIM Toolkit (MPESA Menu> Loans &Savings > KCB MPESA). Only KCB Customers can access the KCB MPESA option via the KCB App. Through the App, KCB Bank Customers can additionally access Kopa Bills, which allows you to access instant mobile loans to settle utility bills and pay back at a later date; not forgetting Mobiloan, which allows KCB customers, access instant loans up to KES 100,000.
