Equity Bank Kenya has reduced interest rates on Equitel loans and other credit facilities such as “Eazzy Loan” and “Eazzy Plus Loan” after the new Banking (Amendment) Act 2016.
With effect from 14th of September 2016, the bank adjusted interest rates to 14.5% p.a as stipulated by the Central Bank of Kenya.
“The Banking (Amendment) Act 2016 section 33(1) (a) says “ the maximum interest rate chargeable for a credit facility in Kenya at no more than four percent, the base rate set and published by the Central Bank of Kenya….” 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% and 10% 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% being 70% of the current base rate as set by CBK at 10.5% p.a.
With its suite of deposit accounts attracting a minimum interest rate of 7.35%p.a, the firm is inviting customers to make full use of these products to build their savings and investments. The firm has also made it possible for customers to access emergency loans of up to 90% of their savings in move to help them build their savings and investments.