“Beyond interest rates, there are other costs that influence access to credit. And through the Cost of Credit Committee the Government, regulators and industry have identified priority initiatives to address these inefficiencies,” he said.
Among them include reforms of the Lands and Companies Registries; establishing the legal and regulatory framework to support the creation of an electronic movable assets register; and expanding credit information sharing beyond KBA Member Banks to all regulated banks and other entities, including non-bank credit providers, utilities and mobile network operators.
“With these and other initiatives that will be overseen by the Cost of Credit Committee, I fully believe that as a country we will ultimately have a more efficient credit system and, enhanced access to credit,” he added.
KBA also launched the Credit Calculator Online website www.costofcredit.co.ke and mobile application which provides the relevant information on the industry’s new pricing regime.
On his part KBA Chief Executive Officer Habil Olaka said that the industry-led APR implementation was also a consumer protection intervention that highlights banks’ commitment to provide customers with facts that they need to make informed credit decisions.
Olaka said the new website also feature tools for borrowers to use when making a loan decision, including a quick APR estimate and a comprehensive calculator that capture all the costs associated with a loan facility.
Next time you apply for a loan : enquire about the KBRR, have the bank provide you with the total Cost of Credit and Loan Repayment Schedule, ask for the APR, use the APR to compare your first option with similar loan products in the market.
In 2013, total loans and advances stood at Sh1.6 trillion, with credit expansion going up 7 percent to Sh1.7 trillion in the first quarter of 2014.
As at May 2014 average lending rates stood at 15 percent down from 17.43 percent in 2013 and 22 percent in 2012.