For further pricing transparency, banks have proactively adopted the Annual Percentage Rate (APR) pricing model. APR is the percentage (%) representation of the Total Cost of Credit.
We tend to focus on the loan interest rate when comparing bank products; however, interest rate does not cover the full cost of the loan. This is why the Total Cost of Credit or TCC disclosure by banks is important.
The TCC is an itemized list of costs and other variables that constitute the total cost of the loan. The APR is a percentage representation of the TCC variables.
The Kenya Bankers Association (KBA) published the “Consumer Guide to Banking in Kenya” to define standards of good banking practice for both bank customers and members of the KBA.An English and Kiswahili translation of this Guide canbe accessed via the KBA Web site:www.kba.co.ke..