Equity Bank, starting Wednesday, August 1 lowered the interest rate charged on loans to a maximum of 13%p.a to reflect the new Central Bank Rate (CBR) of 9%.
This move comes a few days after CBK announced the drop in rates. The relief the lender said will apply to new and existing loans, including group loans, microfinance loans and mobile loans as well as credit cards.
The Bank slashed its lending rates to 13.5% in March 2018, and before that to 14% in September 2016, after the interest capping law came into effect on 14 March.
The minimum interest on saving deposits at the lender has also been capped at 6.3% which follows the stipulation of the Monetary Policy Committee (MPC) to pay interest at 70% of CBR.
Equity Group CEO Dr James Mwangi while making the announcement said he was positive that this move will result in economic growth, which will create significant opportunities and employment for the youth.
“It is now anticipated that the affordable interest rates will stimulate private sector borrowing, thus enhancing the economic growth rate,” he said.
The new revised rates are in compliance with the interest capping law that requires commercial banks and mortgage finance companies to lower lending rates to 13% up from 13.5%.
The law allows an interest margin of only 4 percentage points above the CBR. In the latest review, the MPC cut the base lending rate by 50 basis points to 9% down from 9.5%.
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