Individuals, firms and developing nations need money to survive, thrive and expand in all aspects of their endeavours. Bringing it home to Kenya, fund is the highest means of survival. This is where getting soft loans in Kenya comes in.

However, for whatever reasons we may need cash for, it is advisable to look for the lowest loan rate and favourable terms loans. This helps you save up from the excess amount you would have repaid normally and have an extended grace period for repayment. Therefore, simply feel free to go through this article and learn how to get soft loans in Kenya.

What are soft loans

Soft loans are loans with little or no interest rate. Often it is below the market rate of interest. It also has lenient terms and conditions, grace extension periods where you can only pay for the interest rate and service charge. Typically, they offer a longer repayment schedule unlike other loan platforms.

Moreover, multinational development banks or federal government finance firms. Such loans are also called “Soft financing” or “Concessional funding”. Developing countries that could not borrow at the market rate goes for soft loans.

How to get soft loans in Kenya

In getting soft loans in Kenya, there are lenders to turn to. We have researched and compiled a list of some lenders that provide soft loans in Kenya.

S/no	Lenders	Interest Rates
1	mKey loans	9%
2	Branch loans	6% to 16%
3	KCB M-Pesa	4% to 15%
4	M-shwari	7.5% for 30 days
5	Mco-op cash loans	1.166% to 3.498%
6	Eazzy loans	2% to 10% for one month to 12 month
7	Timiza	6.17% for 30days
8	Whizz	7.725% for 30days
9	Nic mobile banking	1.13%

You can also check out how to apply for a loan in Kenya

How soft loans work

Soft loans are offered to support growing individuals or business owners to thrive, survive and expand. It helps them narrow their resources down and handle tremendous tasks.

Developing countries also go for this type of loan. It works in the sense that a tie is formed between the lender and the borrower. Especially if the borrower (either individual or developing country) has a resource or product that greatly interests the lender.

Pros and cons

Pros:

Progress and boost for business 

Along with serving as a great value to the lender tieing the lender and the borrower together, soft loans offer business opportunities. Many firms who receive such loans do well to manage their funds and put the remaining to other aspects of their business. 

Cons:

Late returns occurring 

The time to repay the soft loan might take too long and the opportunity for dialogue might not be there again. The tie and the relationship often lead to late returns. 

Default or repayment problem arising

There is the issue of the borrower defaulting, despite the soft loan’s favourable terms and conditions. Individuals’ or firms may be tempted to take more cash than they can afford. Such a situation can lead to repayment problems.

How to apply for soft loans in Kenya

To apply for soft loans in Kenya, follow the steps below:

1. Visit the lender’s website to apply or download the app on google play store
2. Install the application and register on the app
3. Allow the app to access your phone’s data
4. Apply for the loan limit you qualify for and cross check all details
5. Wait for loan approval 
6. Get your loan once approved

You can also read how to apply for tala loans in Kenya

Conclusion

It is wise to choose the right soft loan for your specific needs. Therefore, it is important to pay keen attention to the lender’s interest rates, loan duration and additional and extension fees before committing. Whether as an individual, firm or developing country, you can easily get that soft loan from the methods listed in this article.