Kenyan banks have been competing for the digital lending space seeking to increase their market share in the lending turf.
According to a report by Cytonn Investments, in a bid to take advantage of the increased adoption of digital banking, whose main selling point is the convenience it provides for customers.
Here are some of the banks that have ventured into the digital lending space:
HF Group: Listed lender HF Group has ventured into the increasingly popular mobile-based lending segment via an app dubbed HF Whizz, which will enable their customers to borrow between Kshs 1,000 and Kshs 50,000 at a monthly interest rate of 1.1%, and a facilitation fee of 6.6%, which is above average, with most institutions charging between 1.5% and 3.0%. The bank’s customers will also be able to transfer up to Kshs 200,000 daily, in addition to making deposits directly to their bank accounts. The bank tailored the mobile app for smartphone users as opposed to using USSD code, due to the smartphone-based app’s superior value-added options such as expense tracking and budget management,
Commercial Bank of Africa (CBA): Commercial Bank of Africa (CBA) also launched a digital banking platform that allows the bank’s customers to borrow up to Kshs 3.0 mn, which is currently the highest among all digital platforms. The payment period of the maximum borrowable amount has been capped at 3-years. Customers also have access to an overdraft facility of up to Kshs 100,000, which is contingent on their financial track record. The loan service has been appended to the bank’s platform called “Loop”, which was launched in March 2017. Customers will be able to perform Loop to Loop transfers for free while payments done via the Safaricom Paybill and Buy Goods services will attract no additional bank charges. Furthermore, the transaction charges for Loop to M-pesa have been reduced by 44.0% while charges for Loop to ATM have been reduced by 40.0%, and,
UBA Kenya: UBA Kenya also released an interactive chat banker platform that enables the bank’s customers to make use of social media platforms to conduct bank transactions. Through the app dubbed “Leo”, Facebook users can open accounts, transfer money to other accounts, top up airtime and request for mini statements via the platform.
The creation of the social-media based platform was informed by smartphone users spending 80.0% of their time on three apps: WhatsApp, Facebook and YouTube. Since its launch in the Nigerian market, the app has had over 35.0 mn conversations, with over 500,000 transactions carried out.
The Pan African bank has launched the service in 15 countries.
“We note that competition in the digital banking space has become rife, with several players launching innovative products to tap into the market. The biggest selling point for these products has been the convenience provided. This has created a new revenue source for banks, who earn both transactional income and interest income from the mobile lending space, which is currently unregulated. This improves banks’ overall efficiency as well as diversifies their revenue sources, thereby providing sustainable growth.” Cyton report says.