Timiza Beats All Others To Emerge As The Cheapest Short-Term Loan Facility In Kenya

When shopping for a digital or mobile loan, most Kenyans would look at a litany of things among them; the interest rate, terms and conditions (accessibility), disbursement time, and convenience in terms of payment duration.

Most mobile loan providers in Kenya have been termed beyond reach for the majority of Kenya due to high-interest rates, and information needed that goes beyond the data protection requirements. Most take up to a month for one to pay back, while some require someone to pay back as soon as within seven days.

In what was described as making loans more expensive for Kenyans, an amendment to the Excise Duty Act contained in the 2021 Finance Act effected a 20 percent duty charge to fees and commissions on loans, a change which took effect on July 1.

The 20 percent excise duty on loans has sent millions of Kenyans back to the drawing board as they hunt for more affordable loans. This is because some service providers have decided to cash in using the excise duty as an excuse.

We have analyzed the top four mobile lenders in Kenya and what they are offering their customers in terms of the interest rates after the 20 percent excise duty took effect. Where should you shop for your next mobile loan?

Timiza mobile loan facility by Absa Bank Kenya is the cheapest short-term loan in Kenya right now compared to the peers with the excise duty included. The top position was initially held by Vooma that is under the KCB Bank.

Others running after Timiza in terms of affordability are KCB M-Pesa and M-Shwari. This piece will use these four players (Timiza, Vooma, KCB M-Pesa, and M-Shwari) to compare the rates but will leave the choice of judging to where to go to you.

Before the 20 percent excise duty, Timiza would charge 6.083 percent as the total cost of credit. Vooma was charging 5.91 percent (they were the cheapest then), KCB M-Pesa was charging 7.35 percent while M-Shwari was charging 7.5 percent.

After the effecting of 20 percent excise duty, Timiza overtook Vooma and now is charging 7.083 percent while Vooma is charging 7.91 percent for 30 days. KCB M-Pesa is now charging 8.64 percent while M-Shwari is charging 9 percent.

Assume you need a loan of 10,000 shillings. For Timiza, you will be charged 708.3 shillings, Vooma will charge you 791 shillings while KCB M-Pesa will charge you 864 shillings. M-Shwari will charge you 900 shillings. Where will you go for a loan?

Of the four players, why should you go to Timiza? I have gone through all the features offered by the four players and I dare say Timiza is worth giving it a shot and here is why:

The rate. As explained above, their interest rate is currently the cheapest in the market. At 7.083 percent and you are home and dry. It also offers an exclusive savings account. Timiza is a great platform for saving, giving up to 7 percent on savings. This is higher than the other players.

Talking of interest you can earn on savings, here is a table of comparative interest rates between the major players:

Comparative limits also make Timiza the best platform to get the loan from. For Timiza, the average limit goes up to 10,000 shillings. M-Shwari, the average limit is about 4,500 shillings. With the comparative average limits, Timiza also comes with frequent lump-sum credit reviews based on a limit of consumption by the client.

The platform also comes with other auxiliary services such as bill payments that include and are not limited to DStv, KPLC, and Nairobi Water. It also enables cab services in partnership with Little Cab. Of importance, it provides insurances services for personal accidents among others.