KCB Group chief executive Joshua Oigara (right) and retail division
director Annastacia Kimutai during a media briefing on September 28,
2016. He said the KCB M-Pesa platform was temporarily shut down after a
surge in lending. PHOTO | SALATON NJAU | NATION MEDIA GROUP
KCB Group
has resumed lending on its KCB M-Pesa platform after a six-day break
that the bank blamed on a technical hitch due to a surge in loan
applications.
Customers were unable to borrow on the
platform, which can handle 300 transactions per second, from Thursday
until Wednesday morning although other services on the platform were
available.
The bank says the surge in applications has
come after the bank’s announcement that the interest rates on mobile
loans would be subjected to a cap of 14 per cent as per the new law on
interest rates, effectively bringing the monthly rate down to 1.17 per
cent on the facility.
Previously, KCB charged up to six per cent monthly for the loans.
“Last
week we had announced a new rate for our mobile lending platform, and
that resulted in a huge demand from customers. Therefore we had to put
the system down for the lending function in order to enhance its
capacity, although other services such as payment of bills, payment of
loans and salary advance were going on,” said KCB chief executive
officer Joshua Oigara on Wednesday.
“We saw the
highest amount of loan requests in our one and a half years at Sh120
million on Thursday, while we normally would disburse Sh50 million a
day.”
Since its launch in March 2015, KCB M-Pesa has gained seven million customers and disbursed Sh12 billion in cumulative loans.
The average value of loans per customer is Sh1,800, with about 57 per cent of the loans coming under Sh1,000.
The
bank handles on average 30,000 loan requests daily on the mobile
platform, amounting to between Sh50 million and Sh100 million, although
not all are successful.
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