Mwananchi Credit has slashed higher risk category emergency logbook loans rates from six to 3.5 per cent in an effort to deepen credit inclusion at the time borrowers are struggling with effects of Covid-19.
The micro lender has also instituted a special Covid-19 relief to all its clients, providing 100 per cent waiver on all penalties and charges accrued during the pandemic period for all qualifying clients.
The micro finance’s CEO Dennis Mombo announced this on Thursday saying the company is alive to the current economic situation in the country brought about by effects of Covid-19.
“Our customers stood with us, and it is imperative that we stand by them as well. Hence our reason to waiver penalties and charges. As regards our rates, we are reviewing downwards our risk profile to accommodate more people affording our emergency financing solutions,” Mombo said.
Mwananchm Credit is the only Micro lender in the country to adopt the risk based lending programme.
Under this initiative, one negotiates an interest rate based on their risk profile. The lowest bracket currently qualify for emergency financing from as low as 1.5 per cent interest while some of the higher risk bracket goes up to six per cent.
This enables anyone who has a logbook, whether negatively listed on CRB or otherwise, 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.
Last week, the lender announced plans to spread to all 47 counties in the country and is set to open at least an office in major towns by end of the year.
The Nairobi-based microfinance firm currently has three branches in Nairobi, one each in Kitengela, Thika, Mombasa, Eldoret and Kisumu.
