Kenyans can now calculate their full cost of credit, including hidden charges from banks, this after the Central Bank of Kenya and Kenya Bankers Association finally launched the much awaited Cost of Credit Portal
This website is expected to help credit seekers in the country make wise borrowing decisions, a move that is expected to brew completion in the banking sector which is currently operating on a near same level following the operationalization of the Banking Amendment Act 2016 that capped interests at 4 per cent above the Central Bank Rate of 10 per cent.
Even so, banks have continued to insert hidden charges in their credit packages, forcing borrowers to access credits beyond the 14 per cent limit.
According to CBK, already three types of loan products: Personal secured, unsecured and mortgage loan have been featured on the website with other loan facilities to be added gradually.
‘’ The website provide consumers with a simplified and advanced total cost of credit calculators to inform their decisions before taking up a loan product,’’ read joined statement by CBK and KBA.
The two bodies reiterated their commitment to ensure a transparent financial market in the country through full disclosure of credit information, saying that it was the key element of an effective, safe and sound banking system
This launch of this website comes at the time another bill is already in the parliament to have the 4 per cent cap applied on the total cost of credit which is reflected as percentage under the Annual Percentage Rate (APR) adopted by the KBA three years ago.
The Banking Amendment Bill 2017 seek to compel banks to include non interest charges which includes legal, insurance and consultation fees in their total interests
The proposed amendment has already attracted opposition from banks which termed it as dictatorial. Banks are finding it hard to adopt the near free market brought about by the Banking Amendment Act 2016 with most of them reporting profit losses.
Consumers can benefit from this service by simply visiting www.costofcredit.co.ke