UBA is cheapest lender to SMEs

A UBA branch in Nairobi. file photo | nmg 

By BRIAN NGUGI

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Summary

• UBA beat large commercial banks in costs charged to its customers, according to the Think Business Banking Tariff Survey 2017.
• Paramount Bank was ranked the second overall cheapest lender.
• ABC Bank and Credit Bank tied  in  third  spot while Consolidated Bank and Guardian Bank were fifth.

Bottom-tier lender UBA is the cheapest bank for small and medium-sized enterprises (SMEs), according to a newly released banking sector report.

The Think Business Banking Tariff Survey 2017, whose findings were released Wednesday, says UBA beat large commercial banks in costs charged to its customers.

“In addition for the banks with the lowest charges UBA emerged as the overall lender with the lowest charges in SME banking for 2017,” said Think Business chief executive Ochieng Oloo.

Paramount Bank was ranked the second overall cheapest lender.

The findings were based on commercial bank general tariff guides.

ABC Bank and Credit Bank tied  in  third  spot while Consolidated Bank and Guardian Bank were fifth.

The Think Business  tariff  survey  covered  retail  banking  and  SME  banking business  across  38  commercial  banks.

Besides gleaning information from charges that the banks levied according to set tariff guides, the survey was done across six major counties between January 27 and February 2 this year and featured 1,093 respondents.

The research was conducted by Think Business in partnership with research firm Infotrak and Financial Sector Deepening (FSD) Kenya.

Cooperative Bank of Kenya

and  Equity Bank

topped the list of Kenya’s biggest banks with the  lowest  charges in SME banking for 2017.

Housing Finance 

emerged as the tie- two lender with the lowest  charges for SME  banking in 2017,  while ABC  Bank and UBA topped tier-three and  tier -four as lenders with the  lowest  charges respectively.

READ: Barclays and Equity bank loans most expensive, among large banks

The survey found that the industry’s annual average cost of banking dropped from Sh12,935 in 2016 to Sh11,959 in 2017, a decrease of eight per cent.

Some 83.2 per cent of the respondents in the survey said they operated personal banking accounts exclusively.

On the other hand 7.1  per cent  of  the  respondents said they operated  exclusive  SME bank  accounts  while  9.7 operate  a mix  of  both  SME and  personal  bank  accounts.

The survey found that over-the-counter transactions remain the  most  preferable  method  of  making  deposits, being used by  53.9  per cent of banking customers.