Group CEO Joshua Oigara says the system, which is now back, went down last Thursday due to a sudden rise in mobile transactions which could not be handled by the bank’s systems/COURTESY
NAIROBI, Kenya, Sep 28 – KCB bank has denied reports that it has suspended its M-PESA lending platform adding that the recent interruption was caused by system hitch.
Group CEO Joshua Oigara says the system, which is now back, went down last Thursday due to a sudden rise in mobile transactions which could not be handled by the bank’s systems.
“The adjustment on the product which was occasioned by a technical hitch which hit the platform last week affecting disbursement of loans, was meant to guarantee better services and enhance security,” Oigara said while confirming that the bank had resumed lending the platform on Wednesday morning.
He says the day had at least Sh120 million of loan requests against a daily transaction of at least Sh50million.
“The system review now allows the bank to accommodate more loan requests. We have also enhanced the credit scoring model as our way of deepening uptake of financial services,” he added.
The bank interest rates for the MPESA borrowing has gone down from around 4 to 6 percent to 3.61 percent. The bank is now charging 1.16 percent per month, a one off negotiation fee of 2.5 percent as well as excise duty on the non interest rate fees or negotiation fees, “as required by law.”
“We have seen a sharp rise in loan requests on all our mobile loans following the decrease in interest rates, meaning the platform remains central in further deepening the financial inclusion agenda,” Oigara said.
At least 40 percent of the loans processed through KCB MPESA are below Sh500 and 57 percent are below Sh1000 despite a maximum limit of Sh100,000.
Since the launch of the platform in March last year, KCB has extended financial services to over 7 million customers disbursing at least Sh12 billion in loans or an average of Sh800 million every month.
