6. CHARGES AND INTEREST
- Interest on the facility shall be paid at the applicable Central Bank Rate plus a Premium(K), per annum or such other rate as the Bank may determine in its absolute and sole discretion from time to time, provided that such rate shall not exceed any maximum permitted by law and more specifically tabulated in the Application Form.
- Interest on the Facility(ies) shall be computed on a reducing balance basis, and shall be debited and payable (as well after as before and after judgement) monthly by way of compound interest but without prejudice to the Bank’s right to require payment of such interest when due. Interest on the Facility(ies) shall fall due on the last working day of each calendar month, including the calendar month in which the loan has been availed. In case the last working day of the calendar month is a holiday or a non-business day, the interest shall be due on the following working day.
- The Bank may from time to time at its sole discretion and within the limits permitted by law revise the Premium(K) and applicable rate or rates of interest payable, provided however that the Bank shall give the Borrower at least thirty (30) days' notice prior to any change in the rate or rates of interest payable and any such change will not prejudice in any way the Bank’s right to recover interest charged subsequent to such change. Provided that the change in the CBR shall apply with immediate effect with no requirement for prior notice.
- Interest indicated in the Application Form shall apply to the Facility provided that no Event of Default has occurred on the said Facility and subject to Section 7 (Interest on Excess and Arrears). The provisions with respect to Interest on Excess and Arrears set out in Section 7 (Interest on Excess and Arrears) shall apply in the Event of Default as defined in this letter
- For purposes of computing interest on the facility(ies), a 365-day year shall be applied in respect to facilities denominated Kenya Shillings (Kshs).
- CBR” means the Central Bank Rate. The Central Bank Rate will change from time to time as published by the Monetary Committee of the Central Bank of Kenya.
- "Premium (K)" means the deviation percentile rate per annum added to or deducted from the CBR . The Premium comprises of:-
- The Bank’s operating costs/ administrative overheads.
- Cost of Capital/ Return to shareholders/Profit Margin
- Liquidity Risk Costs
- The Borrower’s risk premium.
- Any other costs/discounts as permitted by law