The findings by McKinsey and Company come amid a year-long tariff fight between the U.S. and China, which has spilled into areas such as technology and security.China Economyread more
Beto O'Rourke's campaign for the 2020 election raised just $3.6 million in the second quarter of this year, putting him in the lower tier of candidates who have struggled to...2020 Electionsread more
NAIROBI, May 20 (Reuters) - Five Kenyan banks have launched a lending service via mobile phone aimed at getting credit through to the country's small and medium-sized businesses, the central bank said on Monday.
Private sector credit growth has been sluggish since the government capped commercial lending rates at four percentage points above the central bank rate in September 2016, after lawmakers said they were concerned about high rates.
But this has led to a private credit squeeze, with banks saying the move forced them to cut back on loans to high-risk groups. And pressure on banks to use mobile channels to cut costs has increased since the government capped rates, crimping their profit margins.
Kenyan lenders have also been turning to technology in response to competition from mobile phone-based services such as Safaricom's M-Pesa. Safaricom says default rates on its platform are in the single digits.
Under the new pilot SME lending service, KCB Bank Kenya , Commercial Bank of Africa Limited (CBA), Cooperative Bank of Kenya, Diamond Trust Bank and NIC Group are targeting 3,500 businesses.
They will be offered unsecured loans of between 30,000 Kenyan shillings ($297) and 250,000 Kenyan shillings with a repayment period of between one and 12 months and attracting an interest rate of 9% per annum, the central bank said.
"Customers will be scored and advised of their credit limit. Additionally, they are eligible for a top-up functionality once 80 percent of the loan borrowed has been repaid or track record of three months repayment," it said.
The central bank did not say how much money had gone into the pilot for the scheme, but said that another 10,000 businesses will be enrolled for the second phase of testing. ($1 = 101.0000 Kenyan shillings) (Reporting by George Obulutsa; editing by Elias Biryabarema and Alexander Smith)