Co-op Bank marks Easter by Slashing Interest Rates on Personal and Asset Loans
Co-op Bank has made a significant move to reduce the interest rates charged on Personal Loans and Asset Finance to selected key borrowers from 14% per annum to 13% p.a. with effect from April 1 this year.
This rather ‘contrarian approach’ bucks the industry trend where majority of the lenders are revising lending rates significantly upwards, especially in light of the recent upward adjustment of CBR by a huge 75 basis points to 9.5%.
Co-op Bank’s reduction of the lending rate is the bank’s response to the good loan repayment record and reduced default risk that the target check-off scheme loans have recorded over time. It is a deserved reward for customers who have maintained a consistently good credit record.
Among the main beneficiaries of the new lower rates include key corporate and institutional employers including the Kenya Defense Forces (KDF) and other armed services, the Kenya Police Service, the Teachers Service Commission (TSC), Government Ministries, the National Assembly, key state corporations such as Kenya Revenue Authority (KRA), KenGen among others.
Customers have been informed directly by way of a text message:
“Dear Customer, You can now top-up your existing personal loan at a rate of 13% per annum instead of 14%. Please apply at any Co-op Bank Branch.”
The new offer has elicited palpable excitement as it offers a huge relief especially at this season when many Kenyans are grappling with a cash crunch, when ‘every shilling counts’.
Co-op Bank retains a credit pricing model that is dynamic and attuned to respond effectively to credit performance. In this regard, the bank is working to extend this benefit beyond the current target customer segments namely Personal Loans and Asset Finance, to include all borrowers with good credit history.