Barclays waives cost on unsecured loans

By NICHOLAS  WAITATHU

Barclays Bank of Kenya customers are set to enjoy substantial savings following a waiver of credit life insurance on unsecured loans.

Customers will enjoy monthly savings of up to Sh3,200, effectively making the bank loans among the most affordable in Kenya. 

Managing Director Jeremy Awori disclosed that the waiver translates to a 1.5 per cent reduction on the customers’ interest rate charges.

“With this bold step that Barclays is taking, customers will enjoy savings on their payments of up to Sh3,200, effectively making Barclays loans among the most affordable in Kenya,” he said.

Under the new initiative the bank will absorb the life insurance premiums associated with unsecured loans, providing significant cost savings for its customers on their monthly loan repayments. 

Currently, the bank offers unsecured loan at between 15 per cent and 19 per cent. Credit life insurance is normally a mandatory requirement for customers taking unsecured loans.

The insurance provides debt protection cover, which cushions the customers and their families in the unfortunate event of death or permanent disability by settling the balance of the loan.

Consumer Banking Director Zahid Mustafa said under the new initiative, the bank seeks common insurance of the total amount of money to be advanced as a loan in order to give customers a better deal in terms of borrowing more at cheaper rates.

“We expect the new development will enhance customers’ appetite to borrow more to finance their businesses. Loan uptake in the bank will go up by more than 20 per cent,” said Mustafa.

He added that by covering the loan cost, costs will decrease, customers will borrow more, and there will be less paper work. “Our intention is to make the loan process convenient,” he added.

Alongside the life insurance waiver on unsecured loans, Awori further confirmed that customers opening both a loan and salary account would receive a free Samsung Galaxy tablet, a Lenovo smart tab or an iPad Mini for every new loan above Sh500,000.

“We are turning the page to a new and exciting three-year journey geared at improving our customer experience through value-adding propositions such as the unique waiver of loan insurance premiums,” Awori explained.

He added, “Through the waiver, we have made a bold and smart move to absorb the associated costs of providing insurance as we strive to provide added value. Our customers will now enjoy substantial savings,” he said. Awori noted that backed by competitive interest rates, Barclays’ consumer banking customers could enjoy unsecured loan facilities of up to Sh4 million repayable in 72 months.

The bank unveiled a three-year strategic plan designed to facilitate faster growth in the future mid this week. The strategy seeks to position the bank on a clear growth road-map.