Top 5 Most Expensive Mobile Loans In Kenya

Kenyans seem to have diverged from ordinary borrowing of funds from the banks and opted for the digital mobile lenders.

The digital lenders have come in handy, helping Kenyans to get access to quick loans, through use of cell phones and mobile apps.

These are convenient compared to loans from the bank which take fortnights to get processed let alone signing of several documents and joining long ques to get served.

Dozens of apps are available at the google play store, and a number of Kenyans have tried to download the apps and taste the waters.

If you have not taken your shot, you should be cautious and consider several things before getting a mobile loan.

You should know that these mobile lenders are not regulated by CBK thus they can manipulate users through charging higher or more interests on the loans as compared to banks.

“The risks associated with unsecured digital lending necessitate lenders to reduce their risk exposure by charging fees and interest rates that are relatively high as compared to conventional loan products,” according to a study by KBA.

KBA study shows that the following are the most expensive mobile lenders in Kenya, with higher rates compared to that set by CBK;

Top 5 most expensive mobile loans in Kenya according to KBA:

• Okoa Stima-Safaricom’s Okoa Stima is the most expensive mobile loan which allows you to pay for electricity tokens charging an interest rate of 43.4 percent.
• Pesa na pesa– Pesa na Pesa is an innovative mobile phone-based borrowing and lending product developed by AVL Capital ltd charging an interest rate 43.4 percent.
• Kopa Chapaa– Kopa Chapaa is a 10-day loan available to AirTel Money customers for low-value cash emergencies in partnership with Faulu Kenya charging a rate of 38.8 percent.
• Pesa Pata-The Peer to peer mobile lending platform charges an interest of 30.4 percent on loanees.
• Kopa Cash– The airtel product charges a rate of 15.3 percent

These interests are charged with an additional penalty to those who default the loans. Okoa Stima, for example, charges a 10 percent penalty to defaulters.

Mobile loans have been the reason why most Kenyans are listed by Credit Reference Bureaus (CRB) with most of those listed defaulting loans below 1000 shillings.