Mwananchi Credit has slashed higher-risk category emergency logbook loans interest rates from 6% to 3.5 %. This is a strategic move informed by the company’s resolve to deepen credit inclusion for Kenyans.
Further, the company has instituted a special Covid-19 relief, providing 100% waiver on all penalties and charges accrued during the pandemic period for all qualifying customers.
“We are alive to the fact that the current economic situation in the country is tough,” the micro financier’s CEO Dennis Mombo says. “Everyone is feeling the pinch. However, despite everything, our customers have stood with us, and it is imperative that we stand by them as well. Hence our reason to waiver penalties and charges.”
On interest rates, Mr Mombo said, Mwananchi Credit is reviewing downwards its risk profile to accommodate more people in the emergency financing solutions. Mwananchi Credit was the first and currently the only micro-finance institution to adopt the risk-based lending model. This way, customers negotiate interest rates based on their risk profiles.
The lowest bracket currently qualifies for emergency financing from as low as 1.5% interest while some of the higher risk bracket goes up to 6%. It is this higher risk profile that is being lowered to 3.5% .
This enables anyone who has a logbook, whether or not listed on CRB, to actually qualify for financing based on an innovative future-earning capacity credit scoring model that qualifies applicants based on their future plans and ability to repay rather than their past financial history.
The micro-finance institution has been previously ranked ‘Best Logbook Provider in Kenya” for its innovative approach to lending.