Co-op Bank changing the business landscape with innovative MSME Business Loans

February 28, 2022 at 18:47
Co-op Bank changing the business landscape with innovative MSME Business Loans

Are you a business owner running a Micro, Small and Medium Enterprises (MSMEs)? Do you want to boost your business, but you’re falling short of funds?

Worry no more. Co-op Bank MSME business plus loans has you covered. 

In partnership with International Finance Corporations, Co-op Bank has conducted numerous research to understand the Micro, Small and Medium Enterprises (MSMEs).

The bank has developed a solution to help these entrepreneurs meet their needs and align with existing and new opportunities.

MSME Term Loan: What It Is?

An MSME term loan is the funds your business can secure to raise supply operations or expand your business.

The loans come with a repayment period between 12 to 60 months, depending on your business scale.

The bank offers both unsecured term loans and partially secured term loans.

According to Arthur Muchangi, the Director Retail & Business Banking at Cooperative Bank,

“Our message to MSMEs is simple; we have heard you. We have made available a substantial kitty of Sh15.2 Billion for a package of loans that include an unsecured business loan, a first of its kind in Kenya.

E-Credit through our MCo-op Cash App, where businesses can borrow up to Sh2 million via their mobile phone packaged insurance cover, which is handpicked and specifically negotiated to suit various segments under MSME, revised and pre-approved limits on overdrafts and loans.

The loans will be supported by trade services that include Letters of Credit, guarantees, supply chain financing, among others.”

What Are the Key Features of Co-op Bank MSME Current Account?

Co-op Bank MSME’s current account offers custom-tailored features that range from mobile loans, secured and unsecured overdrafts, insurance solutions, payment solutions, supply chain financing, credit cards, cheque book, internet banking, debit cards,

Mobile banking, dedicated relationship manager and non-financial services like training and networking.

Co-op Bank MSME solutions address the needs of entrepreneurs by providing three MSME account packages that address different requirements for their customers:

  • Gold: Offers a maximum of Ksh 10 million unsecured and Ksh 15 million for partially secured loans
  • Silver: A maximum loan of Ksh 6 million unsecured and Ksh 8 million for secured loans
  • Bronze: A maximum of Ksh 600,000 unsecured and Ksh 3 million secured loans

Unsecured loans have a repayment period of 24 months, while secured loans have a repayment period of up to 60 months.

In addition, all account holders get the following services from Co-op Bank:

  • Free monthly e-statements
  • Access to MSME asset solutions and daylight overdrafts
  • Free In-house standing orders
  • Bargainable FX conversion rates
  • SMS and Email alerts
  • Access to trade finance services.

What Are the Interest Rates Charged on Co-op Bank MSME Loans?

Co-op Bank charges MSME loans in two different ways; a customer can opt for any two.

Flat Rate MSME Loans

The loan attracts an interest rate of 13% per year with 2.5% appraisal fees. The loan comes with a maximum of 36 months and attracts no negotiation or application fees.

Reducing Balance MSME Loans

Loans attract an interest rate of 13% per annual with application fees of between Ksh 3 million to 15 million depending on the amount. The loan also attracts an appraisal fee of 3% and comes with a maximum tenor of 36 months.

Who Can Qualify for Co-op Bank MSME Loans?

Customers operating business accounts with Co-op Bank as individuals are eligible to apply for the MSME loans if they meet the following criteria:

  • A customer should have an account linked to MCo-op Cash
  • A customer should have zero non-performing loans with the bank
  • A customer should not be blacklisted by the CRB or on the bank’s blacklist
  • Should hold an account with Co-op Bank for at least six months.
  • Should be between the age of 18-65 years
  • Must hold accounts not overdrawn over the approved limit
  • Must not hold any arrears with the bank at the time of application
  • Should not have any blocked funds in their accounts
  • Should not have any of their loans with the bank written off

How to Apply for MSME Loan From Co-op Bank

If you’re not a Co-op Bank member, visit the local bank to open an account and start transacting to enjoy the benefits of MSME loans after six months.

For existing Co-op Bank members, use your MCo-opCash App or dial *667# and register to start the application if you qualify.

You can Download the MCo-opCash App from the google play store.

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