The Role of Instant Loans with Top 5 Money Apps in Kenya

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No more long waits, no more queues, and no more teller delays. With the wake of mobiloans, it's possible to initiate and receive credit through cellphones.

East Africa’s most innovative nation in mobile money, Kenya, still on the forefront. Kenyan citizens can now fix emergencies without worrying about paydays.

Access to instant loans in Kenya is now easy with the rise of mobile money lenders and Safaricom’s M-Pesa breakthrough. The facility which was dominated by top-tier financial institutions like, KCB, Equity Bank, and Mshwari, has seen new entrants in the recent past.

The new mobile apps are purely for users to access unsecured mobiloans instantly 24 hours a day. The apps are straightforward and secure. In fact, none of them charges a processing fee before the loans are disbursed. Although there are many android loan apps in Google’s Play store, we’ve narrowed down to top 5 that are actually reliable.

#1 M-Swari

This facility is probably the most common and widely used across Safaricom subscribers. You’ll qualify for an M-Shwari loan automatically once you’ve been an active M-Pesa user for at least 6 months. The facility has been in the market since its launch in 2012 and offers a minimum loan of Kes 100. The loan limit gradually rises depending on your M-Pesa transactions.

Details

. One has to be an active M-Pesa user for at least 6 months to be eligible.

. The minimum amount one can borrow is Kes 100.

. The maximum one can borrow is Kes 1,000,000.

The loan attracts an interest rate of 7.5% for 30 days.

. Repayment is within 30 days. A fee may be added on your loan if you fail to pay in time and the loan rolled over to the next month.

#2 KCB M-Pesa

Also available within the M-Pesa menu under the Loans and Savings option, is the KCB M-Pesa. You don’t have to be a KCB account holder for you to access this facility, but just an active M-Pesa user for at least 6 months. Like M-Swari, KCB M-Pesa also offers a minimum loan of Kes 100.

Details

Benefits of borrowing from KCB M-Pesa compared to M-Swari

. Low interest rates. They charge 1.16% p.m. with a one-off service charge of 2.5%, which is approximately 3.66% in total.

. Flexible repayment duration between 1 – 3 months.

. Better loan limits of up to Kes 1,000,000.

. Easy eligibility that only requires one to be an active M-Pesa user and not blacklisted in the CRBs.

#3 Branch International

Branch is another good micro-finance lender that works exclusively on a mobile app. An android device will be necessary for you to download the app from Google’s Play store. You’ll then be required to allow the app to access your M-Pesa messages to estimate your ability to pay the loan.

Once your account is approved, you’ll start by borrowing a minimum of Kes 1,000. And the limit increases gradually after every successful repayment. Depending on your rating, the repayment should be completed with 3 equal weekly installments or 3 monthly installments.

Details

. Download the Branch international app from Google store.

. Enter your information on the form provided through the app.

. To be eligible for a loan, you must be an active M-Pesa user, have a facebook account and allow Branch to access the M-Pesa transaction messages on your phone.

. It offers a minimum loan amount of Kes 1,000.

. It has a maximum loan limit of Kes 50,000.

. Flexible repayment period of 3 equal weekly installments, or 3 equal monthly installments.

#4 Tala

Tala formerly Mkopo Rahisi was the first app to offer instant mobile microloans in Kenya. It’s almost the same as Branch international as one needs to have an android phone to download the app, and also maintain an active Facebook account.

Download the Tala App from play store, install it on your phone and link it to your active Facebook account. You’ll be asked to answer a few questions to estimate your creditworthiness. The app will also ask for permissions to access your M-Pesa messages to determine your repayment capability.

Details

. The loan interest rate is 15% p.m.

. It offers a minimum Loan amount of Kes 500.

. And a maximum loan amount if Kes 50,000.

. Flexible repayment period of 3 equal weekly installments or 1 month.

#5 M-Coop Cash

This is very new and the most unique from the Cooperative Bank of Kenya, one of the top ranked banks in the country. Flexi plus as the call it has made tremendous improvements from what is offered by other apps to enhance customer satisfaction. But in spite of all the advantages over its competitors, only Coop Bank account holders can access the facility.

Details

. You must be a cooperative bank account holder with a regular income.

. Your name should not be blacklisted at the CRBs.

. It offers a loan of up to 150% of your monthly income. This is where complications set in if you receive two or more salaries a month.

. The loan repayment period is between 1 and 3 months.

. It offers the lowest interest rate, 8.5% for three months which is approximately 2.8% p.m.

POINTS TO NOTE – Online mobile money lenders have their Pros and Cons as well.

The Pros

. You don’t need any security to access the loans.

. They are good for a quick fix as the process is automated to make loan approvals and disbursement almost instant as opposed to long queues and heaps of papers from banks.

. They are flexible since the loans can be accessed from anywhere so long as one has the connection to the internet.

The Cons

. There is no solution in loans, they will just postpone your problems to a later date.

. Short repayment periods, mostly between 3 weeks to 3 months, are hectic.

. Despite the flexibility and ease of loan accessibility, these apps charge high interest rates.

. Mostly first loans are too little before you can grow your limits to something meaningful.

. The implication of small loans can be overlooked in budgeting, and before you know it, you’ll be struggling to clear your name at the CRBs.

Finally, you realize that small loans are dangerous and can do a lot of damage if not handled with caution. Always borrow when it’s absolutely necessary.

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