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How Loan sites and Apps Work

Loan apps in Kenya have taken over the country’s lending sector that banks have been left with no choice but to join or perish. As technology continues to dictate how people do business, always put in mind that the consumer is the centre of focus. The customer is at a disadvantage though because they have to try out different products with varying results before settling on any one of them or none.

Most of these loan apps depend almost entirely on your MPESA transaction history to measure your creditworthiness and set limits. For instance, M-Shwari has to ascertain that you have been an active MPESA user for at least six months before approving your loan.

Some of the apps like Branch require you to link your authentic Facebook account during account opening. Apps can also request to access your phone contact list. These are actually their collateral. Should you fail to repay a loan, your friends, family and contacts may be pestered to remind you to repay the loan. That could be embarrassing to you and annoying to them, right?

Loan apps are among the most used for both employed and unemployed people in Kenya. And they are so many numbering over 60 in Kenya alone. More and more Kenyans are taking up loans some of which they are unable to repay, and end up being listed as credit unworthy by CRBs. Such sanctioning by CRBs can affect one’s credit worthiness for even five years. The loans are easily available and most do not need security. They are disbursed within minutes. We have a sneak preview of some of the most prominent loan apps:

You pay transaction costs which range from anywhere between Ksh100 onwards depending on the amount of cash you are borrowing or repaying. What they call negotiation fee or facilitation fee, which is a certain percentage of the total amount being borrowed ranging from 2.5 percent onwards

Content created and supplied by: HabariMoto (via Opera News )

Branch Kenya M-Shwari MPESA


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