KCB Puts aside Sh30 billion credit facility over coronavirus pandemic

KCB Group has set aside a Sh30 billion loan facility, for individuals and businesses coping with the effects of coronavirus pandemic, through its mobile lending platform KCB M-Pesa, which is operated in partnership with Safaricom.

In addition, the creditor says it will extend loan limits and repayment periods for customers who qualify and those with existing loans during the next 90 days.

The funds will be accessible to any M-Pesa registered subscribers, borrowing small loans from Sh50 to Sh1 million, dependent on the customer’s credit scoring.

The loan facility offers 30-day, 90-day and 180-day loans with interest rates of between two percent and six percent.

In a statement on Friday, KCB Group chief executive who doubles as the Kenya Bankers Association (KBA) chairman, Joshua Oigara, said that funds will also be available for “customers who had been blacklisted at the Credit Reference Bureaus (CRBs) but have since cleared their facility”.

“We shall open credit limits to those customers who had been listed because of defaulting on small amounts, but who are now repaying their loans. Customers who need relief are advised to get in touch with us to work out the respective support areas,” said Mr Oigara, who is also the.

The move by KCB is part of measures stated by the Central Bank of Kenya and KBA to ease economic effects caused by the coronavirus (Covid-19) epidemic.

In a bid to curb the spread of the coronavirus, telecoms and commercial banks have pushed for cashless payments by removing transaction costs for customers who move money between their mobile wallets and bank accounts with Airtel and Safaricom wavering transaction costs on mobile money transfers under Sh1, 000 until June.

Individuals and small business owners are also able to renegotiate loan contracts to either allow repayment moratoriums, or extending the repayment periods up to one year.

“We have a role to continue supporting the economy and stimulating growth. The best remedy as our economy starts to slow down is to support our customers to get along with their lives, and to protect jobs by providing additional lending. We have been in crises before, but if we pull together, even in this environment, we will get the solutions Kenya needs,” Mr Oigara said adding that KCB will foot the legal costs associated with the loan restructuring.

KCB has more than 22 million KCP M-Pesa customers who borrowed Sh212 billion in 2019.