Rwanda’s I&M Bank has revised its Éclair Loan product where they will lend up to 17.5 times on one’s salary without collateral.
I&M Bank says that the move to increase unsecured loans to 17.5 times one’s salary from 12 times will respond to market demand and consumer needs.
The Executive Director I&M Bank Rwanda, Faustin Byishimo said that the move is also influenced by their experience over the years and adjustment in the regulatory framework.
He added that the efficiency of the Credit Reference Bureau has seen the availability of more reliable data giving them confidence on their move.
“There have also been changes in the local framework that has improved our confidence. For instance, due to the Credit Reference Bureau, One cannot just divert their salaries without due process. The data is cleaner and reliability is much higher,” he said.
To address the market demands, Byishimo said that they have noticed a rise in demand for loans, especially with the expanding of the middle class.
He said that as the middle class expands, there is a demand for loans as this group seeks to acquire assets and make investments for personal growth.
“Salaries do not always grow but the demand for money has grown, people may want to make investments or acquisitions and acquire more things. There is demand,” he said.
The lender has also reviewed features and requirements to ease access to credit beyond raising the limit on the loans.
The bank has reduced the requirements to 3 documents from 10 documents as well as reduced the time to approval by 50 per cent to 48 hours. Which he said is geared to improve customer experience in access to credit.
One cannot commit more than 50 per cent of their monthly salary to ensure ease of payment and reduce the burden on clients as well as ensure that they still have accessible incomes during the course of repayment of the loan.
“We are well ahead of the market by having a 20-year mortgage which has been existing since 2007, we took a risk then, we have now extended it in 25 years. We were among the first to have long term mortgages and others are following suit,” he said.