Loans in Kenya and what you can borrow

When you hear the names commercial bank, savings and credit cooperative society (sacco ,chama, merry go round,silk), loan app and you don't have money, what comes next to your mind is getting a personal loan, business loan, mobile loan, logbook loan or even agriloan just ton name a few 

Whether you are employed or self employed, you must have thought about taking a loan or most probably have already taken a loan for whatever reasons. 

Loans - whatever other reason you might have but the common one for everyone is lack of funds - money 💸.

Let's say for example you need to start a business and you lack funds - it is at this moment when you realise loans are important and can come at your rescue.

Someone who needs to clear a hospital bill for themselves or relatives and lack money can also think of getting a loan from a lender somewhere in order to clear the bill.

Enough with the examples, and back to the topic of the day ;

What loans do we have in Kenya? 

In Kenya we take loans. The lenders and regulators have tried to name these services in various ways. Let's look at loans in Kenya below; 

1. Sources of loans in Kenya

Some loans in Kenya are named after where the facilities are borrowed from. Here are examples of such loans;

Bank Loans 

These are loans acquired from a commercial bank or a Microfinance Bank (MFB). 

Some of the major banks in Kenya are ;

• Equity Bank ( Equity Bank Loans)
• KCB (KCB Loans)
• Cooperative Bank of Kenya (co-opbank loans)
• Family Bank of Kenya (Family Bank loans)
• National Bank of Kenya (National Bank loans)
• DTB (DTB loans)
• Absa Bank Kenya (Absa loans)
• SBM Bank ( SBM loans)
• I&M Bank (I&M Bank loans) 
• NCBA Bank ( NCBA Bank loans)

Some of the major Microfinance Banks include;

• Faulu MFB
• U&I MFB
• Remu MFB
• Century MFB
• SMEP MFB
• Jamii Bora MFB
• KWFT MFB

Sacco Loans

Loans taken from savings and credit cooperative societies are referred to as Sacco loans. 

Some of the major saccos in Kenya include;

1. Police Sacco
2. Imarika Sacco
3. Unaitas
4. Mwalimu National Sacco
5. Bandari Sacco 
6. Ulinzi Sacco 
7. Magereza Sacco
8. Hazina Sacco
9. Harambee Sacco
10. Wanandege Sacco
11. Waumini Sacco
12. K-Unity Sacco
13. Stima Sacco
14. Safaricom sacco

Sacco loans are known to be the easiest over the counter facilities to acquire in Kenya with a reasonable interest rate compredt to banks and MFB loans.

Pawn ,Shylock loans, Loans against Items

They are loans given against your items. You provide your items or goodsmin exchange of cash. 

Some of these lenders include ;

• Loans on Items Nairobi
• Fairdeals for Cash

Mobile loans 

These loans are available via a mobile phone. Some of the mobile loans come from the lenders I have already mentioned above through mobile banking.

The major players - and their products-  in mobile banking loans include ;

• Absa Bank with Timiza loans
• KCB with VOOMA loans
• Housing Finance with HF whizz loans
• KCB with KCBMpesa loans
• NCBA Bank with M-shwari loans
• Family Bank with PesaPap loans
• Cooperative Bank with MCO-OPCASH loans
• Equity Bank with Equiloans

Loan Apps - this is the newest mobile money source in Kenya. These companies are referred to as digital lenders. They include;

1. Tala loan app
2. Branch loan app
3. Shika loan app 
4. Zenka loan app
5. Okash loan app
6. Stawika loan app
7. Credit Hela loan app
8. Kashway loan app
9. Saida loan app
10. Mykes loan app
11. Kashbora loan app

Credit Cards loans

Credit card holders can get loans mostly over drafts. Many banks offer this service in Kenya. The major credit card manufacturers in Kenya include;

• Visa
• MasterCard
• America Express

Credit-Only Loans

 Extremely close to pawn shops but these are a little bit advanced lenders who give loans to either the employed or people with goods to offer. Their common facilities are logbook loans, title deed loans and salary advance.

Some of the major players in this category include;

• Mwananchi Credit Limited
• Progressive Credit Limited
• Platinum Credit Limited
• Premier Credit Limited
• Jijenge Credit Limited
• Ngao Credit Limited

Friends and Relatives loans

If you have good friends or relatives you can still get some loans from them. 

2. Purpose of loans in Kenya

Loans can still be named according to the use the borrower is going out the money to. This is what many people use to classify loans. 

These loan classification names include;

1. Personal loans - meant for personal use
2. Business loans - meant for business purposes
3. Asset finance - meant for acquiring assets
4. Mortgage loans or Home loans - meant to acquire property (buildings) or land - real estate
5. NGO loans - facilities taken to establish or expand NGOs
6. LPO
7. Bid Bonds

3. Terms of the loans in Kenya

According to the terms of the loan facility, a loan can be;

• Short term loan - to be paid in less than  around 90 days
• Long term loans - meant to be paid after a very long time for example 84 months or above.
• Secured loans - loans which need collateral (security like logbook) to be attached.
• Unsecured loans - nothing is attached to the facility taken.
• Check-off loans - loans which are deducted from the borrower's salary cheque
• Non Check-off loans - no deductions are made from the borrower's salary cheque.
• Interest loans - loans that are charged an interest
• Non-interest loans - these are loans which are not charged any interest - interest free loans

4. Secured loans in Kenya 

These are named after the security required. Such loans include ;

1. Logbook loans - when a car logbook is used as security against the loan offered.
2. Title deed loans - when loans title deed is required as the collateral for the loan provided.
3. Salary Advance - secured against your salary
4. Overdrafts - secured against your account. One of the popular overdraft service in Kenya is fuliza. This is secured against your MPesa account.

5. Borrower's location loans 

Sometimes loans are named as per where the borrower is located. Such loans include;

• Local loans - offered to anyone in the country.
• Diaspora loans - offered to people living or working abroad
• Expatriate loans - offered to foreigners in the country

6. Size of loans in Kenya 

Loans can also be named depending on the amount being provided. These include; 

• Micro loans - ranges from KES 1 to around KES 100,000
• Small loans - ranges from KES 100,000 to KES 1Million
• Bigger loan - loan amounts from KES 1 million and above

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