NAIROBI, Kenya, Jan 5- Kenya Commercial Bank (KCB) Group has announced an asset mobilisation exercise that will see it promote its secured and unsecured loans to its customers over the next four months.
The group\’s Divisional Director of Retail Banking Timothy Kabiru said on Wednesday that the launch of the initiative had been prompted by an increased appetite for unsecured loans as people borrow to finance education fees, home developments acquire assets and also boost their finances.
Through the campaign dubbed \’Mkopo kwa wote", borrowers will be able to access financing from a low of Sh5, 000 to a maximum of Sh3 million and have a flexible repayment period of between six months and six years.
"Interest on the loans will be levied on a reducing balance. KCB will also offer loan refinancing for those seeking to consolidate and pay off loans they hold with other institutions," Mr Kabiru explained, adding that they will largely be targeting salaried, middle and the low income earners.
This initiative follows the reduction in June 2010 of KCB\’s base lending rate from an average 15 percent to 13.5 percent, which was designed to trigger the uptake of loans by the private sector at affordable rates.
Following the successful rights issue last year which raised Sh12.45 billion, the manager said the bank was well positioned to offer personal loans to more customers especially the youth who need access to affordable credit facilities.
The group which had set out to raise Sh15 billion had indicated that the proceeds from the issue would be used to grow its mortgage books.
Through this campaign, Mr Kabiru said the KCB hoped to boost its interest income from fees and commissions to above Sh3 billion.
"KCB also hopes to use the initiative to educate the public on available financing products and benefits just after recent festive season," the director said.
The bank also hopes to leverage on its T24 Core Banking system whose complete implementation enables customers to access the loan products across the group\’s regional network of over 230 branches.
The IT system\’s rollout was completed in August last year and it enables all their customers across East African region to access their services through the one branch banking platform.
The bank has also used the system to introduce innovative technology-driven products and improve its operational efficiency.