Kenya Commercial Bank (KCB) has adjusted its mobile lending interest rate.
The bank has increased the KCB-M-Pesa rate from 4.08 per cent to 7.5 per cent.
The move spells doom to Kenyans who earlier preferred the service provider because of its friendly rates compared to competitors.
In a tweet quoted by Daily Nation, KCB stated that the increment will affect all customers on good books and the defaulters.
"Hello, the interest has been updated for all KCB Mpesa customers both defaulters and those on good books," said the bank in response to a concern from a Twitter user.
Clients will have to wait until KCB starts using a digitised credit scoring method that rates creditworthiness based on one's repayment behaviour.
The increment comes when the Central Bank of Kenya (CBK) is advocating for lower rates.
In July, CBK Governor Patrick Njoroge requested lenders to review their facilitation and processing charges. Besides acknowledging lack of a clear legal guide, Dr Njoroge asked mobile lenders to value customer-centricity.
“This is where we are working with banks … to go beyond the law. You have seen how we have been doing things in terms of customer centricity, the way they have to relate to their customers. The law itself does not tell them to do XYZ, but we are telling them to be appreciative of the burden to the customers and concerns of customers,” Dr Njoroge said as quoted by Business Daily.