The interest rates that are levied on Personal Loans and Asset Finance to a select group of key borrowers have been significantly reduced by Co-operative Bank, going from 14% per year to 13% per year. starting on April 1st 2023.
This somewhat “contrarian approach” goes against the industry trend of the majority of lenders raising lending rates significantly, especially in light of the recent 75 basis point increase in CBR to 9.5%.
The target check-off scheme loans have seen a decrease in default risk over time, which is why Co-op Bank has reduced the lending rate. This is the bank’s response to the good loan repayment record. A merited compensation for clients have kept a reliably decent credit record.
The Kenya Defense Forces (KDF) and other armed forces, the Kenya Police Service, the Teachers Service Commission (TSC), Government Ministries, the National Assembly, and important state corporations like the Kenya Revenue Authority (KRA) and KenGen are among the primary beneficiaries of the new lower rates.
A text message has been sent to customers to inform them directly:
“Dear Customer, You can now top up your existing personal loan at a rate of 13 percent per year, as opposed to 14 percent. Apply at any Co-op Bank location.
The new offer has evoked tangible excitement because it provides a significant amount of relief, particularly during this season, when “every shilling counts” and many Kenyans are struggling to make ends meet.
Co-op Bank continues to use a dynamic credit pricing model that is tuned to effectively respond to credit performance. In this regard, the bank is working to make this benefit available to all borrowers with good credit beyond the current target customer segments of Personal Loans and Asset Finance.
