With most Kenyan banks in a competition to attract most clients, some banks have gone to the length of making sure they charge the lowest interest rates possible to attract more customers.
The move by some of the Kenyan banks to offer cheap loan to their clients is achieved by minimizing the charges imposed on their loans to borrowers. According to the cost of credit portal, most small lender do not levy charges like legal, insurance and processing fees which is a common phenomenon with most big lenders.
Bank of Baroda, for instance, is ranked the cheapest bank to acquire a loan from with an interest of Sh.60,580 on a loan of Ksh.1,000,000 payable in a period of one year. That reflects pure interest charges as the bank does not impose extra levies on loans. This is according to disclosure that ranks small institutions.
KCB bank, First community bank, Housing Finance and Jamii Bora bank were also ranked as some of the best banks when it comes to offering low interest rates on loans.
For instance, KCB charges an interest of Ksh. 71,807 on every Ksh.1,000,000 borrowed from the bank. First Community Bank charges an interest of Ksh. 71,807 as well as Housing Finance, Jamii Bora Bank and Credit bank who charges the same interest of Ksh. 71,807 on a Ksh.1 Million loan payable on a one year period.
On average, Kenyan banks charge an interest of between 2.2 percent to 2.5 percent on their loans. While most of them charge the same interest rates, some have extra charges apart from the interest fee thus making loans from some banks cheap while others tend to be expensive.
List of Banks that offer most affordable loans in Kenya
|Bank||Interest Per Ksh.1 Million loan|
|Bank of Baroda||Ksh.60,580|
|First Community Bank||Ksh.71,807|
|jamii Bora Bank||Ksh.71,807|
|Bank of India||Ksh.83,807|
Non interest charges by big banks on loans makes their loans most expensive with Absa bank leading the group of most expensive lenders. For instance you will be charged an average interest of ksh.143,007 for a Ksh.1 million from Absa bank for a period of one year. Sidian Bank will charge you Ksh. 140,807 while Ecobank will charge you an interest of ksh.121,407 for the same amount of loan over a period of one year.
List of Banks that offer most expensive loans in Kenya
|Bank||Interest on Ksh.1 Million Loan|
|Bank of Africa||Ksh.105,185|