Loan sharks in Kenya exist and they are always eager to lend you money. The expediency with which one gets a loan from them makes it attractive and great despite the high interest rate charged. Also, matching quick cash delivery with immediate needs is one big smile on its own.
Multitudes of lenders have continued to thrive in the local market of Kenya. The banks and mainstream financial institutions are the key stakeholders. But the stringent process and rules regulating these institutions are tedious. When people look at the long processes involved, they keep searching for a less tiring option.
Let us discuss loan sharks in Kenya.
This article discusses loan Sharks in Kenya, and every other thing you should know.
Who are loan sharks?
Loan sharks are also known as Shylocks. Loan sharks save the borrower the energy of the tiring procedures associated with other financial institutions. They work based on a contract binding agreement structure. You need cash, come along with an item equivalent or higher than the cash, and get your loan immediately.
What you should know about Loan Sharks Kenya
The word “Loan Sharks” also means “Shylock”. It has found its space and operation in Kenya and traces its root from the Shakespearean character. When Anthonio ran out of money in Shakespeare’s novel “The Merchant of Venice” and went to a Shylock to ask for a loan. The Shylock agrees to lend Anthonio the cash based on the condition of extracting a pound of flesh when he defaults.
When you default on loan repayment, your item, which served as a collateral, is gone. Be it land or car or laptop, the lender sells the item to recover his money double.
How loan sharks work in Kenya
Miss A goes to Mr. Z to borrow a loan. Miss A comes with an item like a mobile phone. Mr. Z checks the current market value of the mobile phone. If the market value of the mobile phone is equivalent or higher than the loan amount, he goes further in the loan process. When the item’s current market value is lower than the loan amount, Mr. Z reduces the loan amount to either 60% or 65% of the current market value of the mobile phone.
Mr. Z agrees to lend the money at an interest of 20, which should be repaid in one or two weeks. Normally, the time frame for loan sharks is short. He issues Miss A a piece of paper to append her signature. The lender also takes Miss A’s national identity card (ID) to photocopy. The photocopied ID and the phone details are evidence that Miss. A voluntarily gave out the phone as security for her loan. Or she might come back claiming item theft.
Failure to repay the loan will increase the interest to 30% in 30 or 31 days.
After which Mr. Z gains full ownership of the phone. The piece of paper is a signed contract that stipulates that Miss A is allowing Mr. Z full ownership and the right to sell her mobile phone in case he does not pay back in due time.
3 Pros and 6 cons of loan sharks
Pros:
- Instant and quick loans
- Ever ready to help needy citizens at a loan
- Easy to access without prolonged processes
Cons:
- The agreement is often not defined properly to some citizens who can’t read. They sign what they might truly not desire.
- High interest rate attached
- Short period of repayment
- Strict mode of operation
- Lenders often have to deal with stolen items and goes in for it
- When faulty items are received by the lender and the loan is not repaid, the lender loses everything.
How do I find loan sharks?
Where you can find loan sharks are basically online forums or offline. Some are on the streets of Kenya.
5 Catchy words used by loan sharks in Kenya
The many enticing words used by Shylocks in Kenya include:
- Cash in 24hours
- Check-off loans as much as 1million in 24hours
- Cash in 2hours
- Quick loans with just one item
- Get your instant loan to solve your needs.
3 facts about loan sharks Kenya
The additional explanations you need to know about loan sharks Kenya are:
- The government does not regulate it, and so lenders can choose to drift you any percentage interest rates they desire.
- No mercy or grace by some lenders when you default. They sell off your item which served as collateral
- The lender is not ready to give you full terms and conditions governing the loan. They would smartly tell you the interest rate and its accumulation. The repayment amount and duration.
Conclusion
Life is a merry-go-round adventure which can sometimes be good or bad. Emergencies also do not announce its arrival time. Getting quick loans to solve emergency problems without having to meet a requirement or eligibility is a good thing. Loan sharks have its pros and cons. It all depends on you to make your choice.