Loans In Kenya.

Last time i checked, @Coopbankenya could not offer a normal loan product of less than 200k. I was told to apply as a mobile loan.

When i take up mobile loans like Mshwari or KCB-Mpesa; the interest rate is at 7.5% per month.

Many people who take up such mobile loans think that those interest rates are just okay.

What i know is that; if you take up such a loan eg Mshwari at 7.5% per month, that translates into 90% per year.

IF Mshwari gives you a mobile loan of 100k for 1yr, you will end up paying a principal of 100k plus 90k interest. That translates into 15,800/= per month. Since that figure appears unreasonable, they (mobile loan companies) therefore cap their loans on "monthly" basis.

For instance; If you walked into a bank and took a loan of 100k at 15% per year, you will end up paying a principal of 100k plus 15k interest. That translates into 9,580/= per month. Mind you, this is still a higher rate as compared to SACCOs

Majority of SACCOs offer their loans at 12% per year. Thats about 1% per month.

For instance; If you took up a loan of 100k in a SACCO at 12% per year, you will end up paying a principal of 100k plus 12k interest. That translates into 9,330/= per month.

I know mobile loans have helped many Kenyans but they have also enslaved others who take up one loan to pay another. The main reason given for these exorbitant rates includes but not limited to "the risk involved" since there is no form of security from the customers.

Since SACCOs make profits from 1% per month
Banks make profits from 1.25% per month
I therefore believe mobile loan companies can also realize profits below 3% per month.

But all they do is take advantage of the desperate situation of Kenyans who have been turned away by banks and SACCOs for lack of credit history and/or collateral items as security.

NB: Currency in (Ksh)

#WeCanDoBetter