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Credit Bank launches unsecured loans

NAIROBI, Kenya, Nov 4 – Credit Bank Limited has launched its first unsecured personal loan product as it seeks to make a foray into the retail market.

At the same time, the bank has also signs a memorandum of understanding with Kisii University College in a deal that will see the University staff obtain loans from Credit Bank.

Speaking after the signing ceremony at the University, Credit Bank’s Chief Executive Officer Nok Bwonditi said launch of bank’s unsecured personal loan offering was an indication of the bank’s strong confidence in the local consumer market and the general economic outlook following the new constitutional dispensation. 

He said: “This unsecured personal loan is Credit Bank’s first personal loan product and exemplifies our commitment to being the right partner for our customers. We are now open for business and we are committed to supporting our customers. Our flexible and low rate unsecured personal loan products we have launched is part of a range of privileges Credit Bank Customers can benefit from as their financial needs change.” 

Kisii University College Principal Prof. John S. Akama thanked Credit Bank for the agreeing to enter into the partnership adding that the deal will make it easier for the University’s Staff to obtain cheaper loans for their personal and entrepreneurial development.

“We believe it is the right time to have this kind of Memorandum of Understanding with a bank that understands the needs of the average Kenyan. Credit Bank in the last few years has come up with very innovative products, with low opening balance and account maintenance fees and very competitive service charges. As an expanding institution, we’re going to have a very fruitful relationship with Credit Bank and we believe this MOU a win-win situation for both the university and the Bank,” Prof. Akama said.

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Mr Bwonditi added that the new product had been warmly received by the market.

Eligible customers will be able to obtain a loan of between Sh50, 000 and Sh2, 000,000. The repayment period can range from six months to four years, and repayment methods include funds transfers from other banks, over-the-counter repayment and automatic withdrawal from the customer\’s Credit Bank’s account.

“For customers who will be guaranteed by their employers, the organization will undertake to make a lump sum payment to Credit Bank covering all loan repayments due at the end of each month alongside a list of loan applicants. The individual loan accounts will be credited at Credit Bank Branch of as advised by the loan beneficiary,” Mr. Bwonditi explained. 

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The loan will attract 17 percent interest rate per annum which will also cover all other administrative charges, with a one off negotiation fee of 2 percent and Personal Risk margin of 0.4 percent. Mr Bwonditi said that regardless of market volatility, the interest rate will remain at a predetermined rate for the entire term of the loan.

The launch of the banks unsecured personal loan follows the move by the bank to get into retail banking as it shifts strategy to serve the mass market.

“For a long time Credit Bank has been seen as a niche bank with bias to corporate banking. However, as we prepare to break new grounds it is important that we find a balance between corporate, retail and treasury units. With retail loans being one of the focus areas for growth, we are set to introduce more innovative products under its retail loan portfolio,” Mr. Bwonditi said.

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Mr Bwonditi also indicated that the bank would open 10 new branches in the next three to enable it compete more effectively and to make its services more accessible to its consumers. This will effectively take the total branch network to 15 over the next year.

“We will roll out new branches faster, develop and deliver products better and serve our customers in more responsive and convenient ways. We want to hold true to our slogan, “My friend, My Bank”. This is also reflected in our strategic business plan where product innovation, customer service improvement and technological advancement will be the key drivers for our business growth plan going forward,” Mr. Bwonditi concluded.  

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