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Bank of Africa Kenya loans- all you need to know

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Banks are organized financial institutions that save us in times of difficulties. They provide credit facilities to solve different needs. Bank of Africa Kenya loans are not left off the list. They are a structured lending platform that provides different loans to individuals in Kenya.

Let us discuss their categories of loans, the account needed for each loan and how to contact them.

bank-of-africa-loans

About Bank of Africa Kenya 

Bank of Africa Kenya limited (BOA-Kenya) is a commercial bank providing banking services to corporate and individuals. Small and medium enterprises are left behind. They also cater for retail clientele. The bank began activities officially in Kenya in July 2004 and currently has recorded so many achievements. 

They acquired Kenyan branch of Credit Agricole Indosuez, a large international French bank. The French bank has operated in the country for over 20 years. The bank has a wide network of 27 branches country wide and a business center in Nairobi, Kenya.

What you need to know about Bank of Africa Kenya loans 

Basically Bank of Africa Kenya limited offers personal and business loans. Their branch in Kenya offers full services to SMEs and operates in real time. The loans gotten helps their customers to seamlessly and expediently transact business.

Bank of Africa Kenya loans

The different categories of loans offered by Bank of Africa Kenya limited are:

  1. Personal loans (which includes Salary advance)
  2. Asset finance 
  3. Mortgage products 

Personal loans

Their personal loans amount is Ksh 50,000 to Ksh 2,000,000 extended to salaried individuals with minimum net salary of Ksh 25,000.

Eligibility:

  1. Be in a continuous employment for over 6 months
  2. Have a minimum net salary of Ksh 25,000
  3. Qualifying age limit is 55 years
  4. Be ready to pay a processing fee of 3%
  5. Provide a good Credit Reference Bureau report

Benefits:

  1. Comes with a competitive interest rates
  2. Flexible interest installment plan
  3. Can apply for a maximum loan amount Ksh 2,000,000
  4. Receive a minimum loan amount of Ksh 50,000
  5. Fast to processing & disbursement to your personal account or salary account within 1 week

Features:

  1. Enjoy a loan duration of a minimum of 12 months to a maximum of 48 months
  2. Enjoy a response time of 48 hours
  3. Get amount ranging from Ksh 2,000,000 to Ksh 50,000

Requirements:

  1. Submit a completed Bank of Africa Personal Loan application form
  2. Letter of undertaking from employer confirming further payment 
  3. Copy of a valid ID
  4. A PIN certificate
  5. Printed original copies of the preceding 3 months’ payslips
  6. For non-BOA customers, copies of bank statements for 6 months

Asset finance 

Bank of Africa Kenya limited, designed asset finance to enable individuals and businesses acquire durable assets. The asset to be financed will be used to grow the capacity of the business. It would be also used to improve the level of service delivery of an existing enterprise.

Target Audience:

  1. Individuals
  2. Entrepreneurs
  3. Limited companies
  4. Law agencies
  5. Non–profit organizations

Mortgage finance 

Bank of Africa Kenya Limited provides a comprehensive mortgage finance solution. This focuses on providing personal and unique services. They achieve this by enabling their customers to buy, build or improve their own properties or homes.

Mortgage Products Offered:

  1. Home improvement
  2. Property acquisition 
  3. Equity release 
  4. Construction

Requirements:

  1. A properly completed and signed application form.
  2. Provide a sale agreement/offer letter.
  3. Identification card
  4. Passport 
  5. Registration documents for a business.
  6. Copies of payslips.
  7. Print bank statements for the last six months.
  8. Copy of the title of the asset that is serving as a collateral.
  9. A valuation report 
  10. A well-drafted letter of introduction and undertaking from an employer for employed persons.
  11. Open a Bank of Africa Kenya limited Current account.

Benefits:

  1. Own occupation
  2. Gain tax benefit through mortgage relief.
  3. Free financial advice on mortgage products.
  4. Personalized customer service.
  5. Flexible terms of repayment
  6. Begins to save on rent
  7. Receive capital gains from property appreciation.

Different accounts operated by Bank of Africa Kenya for loan disbursement 

  1. Personal account
  2. Current account 
  3. Deposit account
  4. Salary account 
  5. Savings account 

How to contact Bank of Africa Kenya loans

Visit BOA House, Karuna Close, Off Waiyaki Way, Westlands, Nairobi.

You can call them via call at: 0703058000/ 0203275000. If you choose to email them, their email address is yoursay@boakenya.com 

Conclusion 

Bank of Africa Kenya limited has the vision to be the preferred bank to the chosen market. They offer personal, salary advance, mortgages and asset finance to their customers. 

Furthermore, their mission is also to serve their customers with efficiency and courtesy. To contribute to the development of all their stakeholders and lots more. Try Bank of Africa Kenya loans today and enjoy their great features. 

Trade Credit- All you Need To Know

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An important barrier to the growth of businesses and companies in Kenya is finance, especially for SMEs that contribute to the large share of the economy. Working capital is also the key to the success of every business. There are several instruments you can deploy to finance business and, thus, the likes of trade credit.

Trade credit is an essential tool for financing business growth. To get this trade credit, you need a properly prepared financial plan and an established relationship with the supplier.

When you are first starting a business, however, suppliers won’t be disposed to sell to you on credit. While this is a fairly normal tradition, you can still negotiate with the supplier. Depending on the terms, trade credit is favourable to buyers because it is a credit given to you by a supplier who allows you to buy now and pay later.

Trade credit and all you need to know.

What is a Trade Credit?

Trade credit is a business arrangement where a buyer accesses products from the supplier without immediate payment. The buyer pays on a scheduled agreed date. Usually, businesses that deal on trade credit have limits of up to 30 days to 90 days to pay up.

They record trade transactions through an invoice and have a 0% financing. Goods are exchanged between two parties, called the buyer/customer and the supplier/seller.

The customer then supplies to the consumers and pays up later. This process of exchange of goods and extension of payment is called trade credit.

Understanding Trade Credit

Trade credit is offered to a buyer by a supplier in which they make payment on a later agreed date. The platform is a significant advantage for the buyer. In most cases, buyers negotiate a longer trade credit repayment date, which provides even more advantage.

Suppliers have criteria for qualifying for trade credit, which includes the capacity to pay back and an established mutual relationship between both parties. 

Number of days for the credit is determined by the supplier or the company offering the credit. Then is agreed upon by the two entities. Trade credit is a good way to finance short-term growth and maintain a consistent supply of product when you lack finance. 

Relatively, trade credit requires no interest and also encourages sales. Sellers often see it as a disadvantage to them, but they fill the gap by offering a discount. They offer a certain discount amount for buyers to pay up early.   

How does trade credit work?

Trade credit is an advantage to business to business, which helps a party get, manufacture and sell goods before ever having to pay for it. The platform allows companies to receive a revenue channel that can cover costs of goods sold. To go further, different ways that trade credit works are:

  1. The supplier/seller sets and defines the trade credit terms and repayment date.
  2. Suppliers and buyers agree on that date before they seal a contract.
  3. The deal often includes some type of penalty for late repayment and a bonus for early payment. All these terms depend on the supplier. 
  4. Sellers usually send an invoice along with the orders made by the buyer, letting the buyer know how he owes.
  5. These processes are properly recorded and appear on the balance sheet for future references.

Trade Credit in the Real World

Trade credit mostly helps businesses to find avenues to maintain trade flows and growth. New firms that do not possess an established flow of income yet can get a trade credit, but it all depends on the suppliers.

Some can get it through a mutual relationship with the supplier. Once the buyer is sure of selling off the products immediately to the consumer and paying off the credit, he goes for trade credit.

The rise of trade credit as an alternative means of payment has brought growth to some businesses. They have also found that trade credit has financed an approximate 20% of all investments and businesses in Kenya.

To sum it up, trade credit in the actual world of Kenya is doing great and putting smiles on every business that encounters it.

How can I get trade credit?

If you are looking towards opening a trade credit, approach your supplier first. A supplier you currently work with and have developed trust with. You can also start with the vendor equally. 

Advantages

An agreement on trade credit has a lot of advantages for both the buyer and the supplier. The advantages are:

  1. Easy to arrange and operate
  2. Proves and increases supplier’s reputation 
  3. Gears towards business growth
  4. It is a tool used by most business, for supplies of goods or services
  5. Enjoyment of discounts and bulk buying
  6. No payment upfront 
  7. The buyer enjoys a competitive edge and adapts to market demand.
  8. A yielding and potentially low-cost form of working capital finance.
  9. An easy and straight source of short-term finance.
  10. Trade credit reduces the huge capital requirements of businesses 
  11. Helps companies and suppliers focus on core activities, which is manufacturing and immediate sales.
  12. It serves as a strategy for winning new customers, increasing sales 

and keeping customer loyalty

Disadvantages

Access to robust trade credit can seem a lifeline for a cash-strapped business. Also note that if the root of your business means you are likely to not pay back, think again about relying on trade credit. The disadvantages are:

  1. Hard to get for startups and businesses without evidence of cash flow 
  2. Penalties and interest await the buyers when they cannot make payments. 
  3. Legal action can occur parenting the supplier to sue the buyer.
  4. The buyer can get a negative impact on credit rating 
  5. If the buyer meets up with the bargain, he can lose the supplier
  6. Cash flow issues. Late repayment and default can lead to a serious cash flow for the supplier. 
  7. Problem of prolonged customer assessment 
  8. Presents a serious challenge of bad debt to the supplier.

Example

A retailer that sells solar panels and inverters under which the distributor agrees to provide him with panels and inverters under agreement of “Net 80”. The supplier offers the retailer a 10% discount on payment within 50days and a 20% discount on payment within 30days. Meaning that the retailer has 80days to pay up the invoice in full. When so many consumers request the panels and inverters, the retailer may pay up in full or part within 30days and enjoy a 20% discount on the panels and inverter. However, if sales are bad, the supplier can pay up within 50days and enjoy a 10% discount.

The supplier of the panels can also do the same thing. Receiving trade discounts from the manufacturing company that produces inverter components. They may agree to a term and the supplier gets them on credit,if sales are good, the supplier pays up early and enjoys the discount.

Why Companies Offer Trade Credit?

Trade credit is a common way to finance small businesses to generate income to circulate in the economy. The reasons companies offer trade credit are:

  1. It is an alternative to other expensive loan applications. Sellers also use it to boost buyers.
  2. Trade credit is a sale tool and strategy 
  3. It serves as a signal from companies to businesses showing that they offer high-quality products. 
  4. A means to sell off a product by the companies who are in a competitive and tight market.

Where can I find companies that offer trade credit?

Much of the businesses in Kenya run on trade credit. But many companies or suppliers might not offer trade credit to new businesses. While it’s easier to get the supplier’s credit, it is also easier to become one if you are into product manufacturing. 

Fortunately, many companies in Kenya offer trade credit terms to businesses. You see these companies by:

  1. Locating different manufacturers in Kenya.
  2. Locating a Vendor
  3. Visiting a previous seller.

How is trade credit different from bank credit?

Banks and financial institutions offer cash through loans, credit cards, etc. But a supplier offers a Trade credit to a business with specified terms where the buyer pays later. Trade discount involves selling off products while bank credit involves lending loans.

What is the formula for the cost of trade credit?

Trade credit is represented by three numbers, viz:

  1.  The first indicates a discount percentage
  2. The second shows discount period while 
  3. The last portrays the final due date. 

Features

The features of trade credit are the different things that make up the trade credit. It also includes how, where, and what trade credit is. The features are:

  1. It operates on an informal legal instrument or debt acknowledgement. 
  2. An arrangement between the buyer and the supplier/company 
  3. It follows purely an internal arrangement system
  4.  It is basically a spontaneous source of financing for businesses. 

Trade Credit Instruments

They offer most credit on open accounts or mere written agreement. But as time went on, because of failure to keep to a binding agreement, they deployed different instruments. The different instruments used are:

  1. Invoice: this is an instrument generated by the supplier and sent along with the goods. The buyer therefore signs as an evidence of receiving the goods
  2. Account books: the supplier and the buyer have different accounting books they keep for record purposes. They both record series of trade credit transactions on this book
  3. Promissory note or IOU: the platform is used when the buyer offers a large product and when the supplier expects problems in fund collection. It is signed after delivery 
  4. Commercial draft: commercial draft is a written document which serves an instrument to trade credit. It is written by the supplier to the buyer to pay an amount of funding on a particular date. The supplier sends the draft and the invoice to the buyer or the buyer’s bank. It depends on the supplier. When the bank receives and accepts it, they invite the buyer to sign the draft.
  5. Banker’s acceptance: this is also a trade credit instrument which is written by the bank when they accept to pay for a customer’s product and the customer paying them on a later date.

Conclusion 

Trade credit financing is encouraged globally and in Kenya by regulators and can create so many opportunities. Opportunity for new financial technology solutions and growth. Bearing this in mind, trade credit is a means of financing businesses. As a buyer, you can enjoy trade credit to the fullest.

To the suppliers, you will need to get professional legal help to write binding terms and conditions. You also need dedicated account handlers to ensure that outstanding invoices are chased up and payment recovered. Setting clear invoice agreements and ensuring good communication can help encourage buyers to pay promptly and regularly. Check out new instruments and updates on trade credit and follow the trend. 

Finally, deploy capable hands to investigate online accounts software with CRM and invoicing. These modes are ways of ensuring healthy trade credit.

Five C’s Of Credit- All You Need Know

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Loan application and it’s underwriting processes are a practice of analysing, structuring, documenting, and approving credits. Therefore, to achieve all these, lenders need tools to guide them through the process. Also, while considering the risk in credit and following the fact, it is relevant to emphasize on the need to protect financial institutions and individual lenders, hence the five Cs of credit. The 5Cs are fundamental tenets of lending loans.

With the result of the recent CGAP in Kenya, it was noticed that 50% of digital borrowers repay their loan late and default, respectively. To investigate and describe the creditworthiness analysis methods, strategies and procedures, they form requirements within the analysing process.

Thus, let us discuss the 5Cs of credit and all you need to know.

Five C's of credit

What are Five C’s of credit?

The five Cs of credit are a gauge or a system used in weighing creditworthiness of borrowers. It gauges five features of the borrowers, which are capacity, character, capital, collateral, and conditions. Moreso, it analyzes the probability of loan default and capacity for repayment.

No five Cs are more important than the other, but most lenders gauge using capacity. The goal is your ability and willingness to repay your loan. 

Understanding the five C’s of credit in Kenya 

The 5Cs of credit in Kenya have to do with a series of credit analysis by a lender to find out the risk associated with a loan. Regardless of the type of loan you need, the lender is interested in how you will pay back the loan.

In Kenya, credit analysis is governed and controlled by the “five Cs”. The borrower’s character, capacity, condition, capital, and collateral. These 5 components make up the credit analysis. It also helps the lender understand you as a borrower and   your creditworthiness. 

Finally, it is pertinent as a Kenya citizen that you understand these five Cs . It would prepare you for a loan application process and give you the edge you need.

Five C’s of credit in Kenya

In gauging creditworthiness of potential borrowers, 5 features of five Cs are considered. They are:

  1. Character/credit history
  2. Capacity
  3. Collateral
  4. Capital
  5. Conditions

Character/credit history

This refers to the borrower’s repayment track records. Reputation appears in your credit history. It is generated by the CRB in Kenya and contains how much you borrowed and your loan defaults and repayments. Often, if you are looking for jobs, you might be asked to get your credit certificate.

Many lenders also gave a minimum credit score and requirements before a borrower is eligible. Also note that a low interest rate is offered to borrowers with an excellent credit score.

Capacity

This is the ability of the borrower to repay the loan. It is often assessed based on the borrower’s debt-income ratio. They obtained it by adding the potential borrower’s monthly debts payment and dividing it by the gross salary or income.

The lower the DTI, the higher the chance. The length of hon and the job stability are also considered as part of the capacity of the borrower. 

Collateral 

Collateral prices, the risk of loan. They presented it in exchange for loans. It assures the lender that he can get something back in case of default. It is the object of the loan application.

They also referred to as secured loans. Loans secured with collateral often have low interest rates and longer loan duration such as with mortgage loans providers.

Capital

This includes the down payment of loans to show more seriousness and willingness to repay loans. This down payment can make lenders comfortable in extending the loan. A large capital by the borrower reduces the risk of default.  

Conditions

This includes the conditions for the loan, the principal amount, and the interest rate the loan would attract. This also explains what the borrower is using the loan for.

These are the things the lenders find out. The reason behind every loan influences lenders’ decisions for approval. 

Basics of five C’s of credit

The five-Cs-of-credit methods and evaluation are rooted on;

  1.  Qualitative and
  2.  Quantitative measures.

Lenders approve and grant loan applications based on borrower’s credit reports, credit scores, income statements, and other documents. Documents relevant to the borrower’s financial situation are the only one considered. Take note that the information about the loan itself is also considered. 

How lenders analyse the five C’s of credit

Different lenders analyse it differently based on how they want it. They can use any of the 5Cs as a basic gauge for analysis. Let us quickly look at the 5Cs and see how lenders analyse it. 

Character: Lenders look at:

  1. Credit score/history 
  2. Financial reputation 
  3. Other financial credit utilisation 

Capacity: Lenders analyse it by looking at:

  1. Cash flow
  2. Debt-to-income ratio
  3. Debt service ratio

Capital Lenders will want to see:

  1. How much you have invested in your business
  2. Your business net worth 
  3. The real estate you possess 
  4. Ratio of your debt to equity 
  5. The equipment and assets you have

Collateral: Financial institution can perceive it in the form of: 

  1. Your Valuable assets 
  2. Depreciation rates of your assets 
  3. Account receivables

Conditions: conditions include other factors that will influence your loan repayments. They are:

  1. Economic trends 
  2. Issues that are predominant in your business or your workplace
  3. Tangible reasons for the loan application. 

Why are Five C’s of credit important 

The importance of five C’s of credit are:

  1. important?It helps lenders determine the borrower’s credit limit and the interest rate.
  2. It influences, to a large extent, the borrower’s loan approval.
  3. The 5Cs, when properly analysed, give the lender conditions that the borrower would pay back.

How to improve on the five C’s of credit by a borrower

Improving on the 5Cs of credit by the lender involves distinct steps. They include:

  1. Make your payments early
  2. Create a mutual relationship with lenders
  3. Reduce your debts by clearing outstanding debts
  4. Increase your cash flow
  5. Record all your personal investments and knowing off hand
  6. Gain and purchase assets
  7. Control the way you sound. Prepare yourself and use all your loans prudently. 

Frequently asked questions

Of importance, let us recap. The 5 C’s of credit are Character, Capacity, Collateral, Capital, and Conditions.

Why are they all important?

Lenders use these criteria to know if you are qualified for a loan. Eligibility is first considered before a loan application process.

These criteria determine your interest rates and credit limits. They also help determine loan risk and the likelihood of the borrower repaying at the agreed date. 

Is there a sixth ‘C’ of credit?

Often people refer to the credit report/history as the 6th C of credit. It is not yet verified.

Conclusion 

Each financial institution has its own method for analyzing a borrower’s creditworthiness. Using the five Cs of credit is common for both individual and business loan applications.

Of hierarchy, capacity basically, the borrower’s ability to generate consistent income to pay off the interest and principal ranks as the most important. 

But applicants who have high marks in each category are more apt to receive bigger loans, a lower interest rate, and more favorable repayment terms.

These factors are what lenders used to gauge your creditworthiness, but make no mistake. It’s also important for the financial health and stability of your business to check the 5 Cs of credit analysis on your own from time to time. Whether for lenders or for yourself, use this guide to help you strengthen your business’s 5 Cs of credit!

How To Borrow Airtime From Safaricom Line – The Dial Code

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Safaricom offers users a means of borrowing credit and paying it back later as they top up, more like a bank overdraft on their airtime, but at a small fee. How does this work? Let us learn about how to borrow airtime from Safaricom line.

How to borrow airtime from Safaricom line.

About Safaricom Kenya

Safaricom PLC is a Kenyan mobile network operator headquartered in Nairobi, Kenya. Founded in 1997, it is the largest telecommunications provider in Kenya and one of the top 10 most profitable companies in the country.

There are five mobile telecommunication services offered by Safaricom – Simu ya jamii, M-PESA, Prepaid and Postpaid, Business and Enterprise, International Roaming, and Data and Messaging. But Safaricom’s M-PESA application is mostly used and it allows users to transfer money using their mobile phones.

Moreso, in the Data and messaging section, Safaricom provides instant airtime to users through Okoa Jahazi. You can repay later the airtime when you top up.

Okoa Jahazi Code

Eligible individuals or subscribers who meet the requirements can dial *131# or *456*2#, then choose “Auto-Okoa” and select “Subscribe” and choose the amount of Okoa Jahazi loan you want to borrow.

About Safaricom’s Okoa Jahazi Service

This is a service platform where Safaricom PrePay subscribers can borrow airtime when they request it. Services of Safaricom’s Okoa Jahazi:

  1. Subscribers who meet the eligibility criteria can request an advance of mobile airtime using the Okoa Jahazi service.
  2. Credit Advances are credited to their PrePay accounts after they deduct their service charges. 
  3. Safaricom charges an advance fee of 10% for each Credit Advance that you request.

Eligibility For Safaricom’s Okoa Jahazi Airtime Advance 

You must meet a few criteria before you can borrow Safaricom airtime, some of which are listed below:

  1. Sign up for the Safaricom PrePay service.
  2. In order to qualify for the Credit Advance, you must have spent airtime equivalent to the amount requested for the last seven (7) days.
  3. Your account balance must be less than Ksh 2.
  4. Be able to top up over 180 days in order to maintain an active line.

How to Borrow Airtime From Safaricom Line

You can request credit advances by completing the following steps:

  1. By dialing *131#, you will receive a confirmation SMS message which confirms you have received the credit advance.
  2. They cannot cancel once they have submitted credit advance requests.
  3. Tracking your Credit Advance usage is possible by dialling *144*4# and sending an SMS to 144.

Rates For Service Charge on Safaricom Line 

AMOUNT REQUESTED FORSERVICE CHARGEAIRTIME CREDITED 
1000100900
50050450
25025225
1001090
50545
20218
1019

Conclusion

If you have fully repaid your previous credit advance, you can request the credit advance every day. Kenya’s Safaricom is the largest and strongest communications company in the country. It offers several services, including M-PESA, the famous mobile money service.

They offer a platform where you can borrow and pay back airtime. We advise you to read the terms and conditions of these borrowing services in Kenya before getting involved.

Read Also: Where to lease your car in Kenya

6 ways to manage debts- All you need to know

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We will explore 6 ways to manage debts. Nevertheless, amid the current pandemic and the poverty it brought to everyone, people borrow for survival. Notwithstanding the economic crisis, if you have debts, you have to keep up with payments and not allow it to get out of control.

Make a list if you are confused. You can use your credit report to make the list. Then pay off your debts bit by bit while you juggle payments on the other you are not currently paying. Remember, everyone with even a bit of debt has to manage it, else it gets out of control.

6 ways to manage debts

What is debt management? 

Debt management is the procedure or ways you plan to control your debts. It is a way of curtailing extravagant spending which might get out of control. Debt management also has to do with strategies of designing a monthly budget and paying off outstanding debts in order to be debt free. Being debt free gives peace of mind and integrity.

6 ways to manage debts

You have been wondering ways to manage and tackle your debts and ensure you have control over it. Below are 6 ways to manage debts and they are:

  1. Be sure you identify how much you owe
  2. Make monthly repayment on time
  3. Raise a calendar to guide your monthly repayment
  4. Identify the debt to pay off first
  5. Make sure to commit a payment every month
  6. You can make use of your retirement fund and consult your credit counsellor

Be sure you identify how much you owe

If you know exactly how much you owe, you will know how to repay to repay your debts faster, and you will not miss any. As a first step, write all the debts, creditors, their total amount, and their due date. Be sure to write out everything on your list. Then Start with either the one with the nearest due date. Pay sequentially till you clear off all debts.

Make monthly repayments on time

Pay off as much of your debt as you can each month and on time. Pay at least the minimum amount due on each loan and early enough before the due date. This will protect your credit rating. If you can afford to pay more, pay off the loan with the highest interest rate first. As you pay off each loan, start paying more on the next debt in line.

Raise a calendar to guide your monthly repayment

If you have more than one debt, ensure that you make all monthly payments on time, create a monthly calendar and a schedule. You can show which bill you have cleared or still owing and note the bill payment date. The calendar will show detailed information on all your debts and how you plan to pay them off.

Identify the debt to pay off first

Determine which loans you should pay off first; credit card debt and payday loans usually attract higher interest rates than other obligations. Prioritize debts with high interest rates. Attend to it first and it goes on sequentially.

Make sure to commit a payment every month

 Make sure you at least pay a minimum amount each month rather than not paying anything. By doing so, you will keep your debts from growing, ensuring that your account remains in good condition. However, when you miss payments, it becomes difficult to pay the increased amount, which can lower your credit score.

In the future, you may find it difficult to qualify for the most helpful loan because of bad credit. But if your credit score is good, you can get a loan anytime.

Make use of your retirement fund and consult your credit counsellor

Consider talking to a financial planner or credit counselor if you cannot figure out how to reduce your debt. Credit counseling agencies help people deal with their debt problems. With their help, you can develop a plan, help you apply for your retirement fund and get you out of debt.

5 Tips on how to achieve debt management 

The ropes to achieving these 6 ways of debt management are:

  1. Always bear the risks and consequences of debt owning in mind
  2. Be mindful of your integrity. This would make you source for genuine ways of managing debts
  3. Continue to look for genuine ways to make more money
  4. Never relax till you make the last payment 
  5. Be patience enough and hold still 

4 disadvantages of growing debts and joking with debt management 

The disadvantages to debt growing are:

  1. It stains your integrity 
  2. CRBs shortlist your name and you won’t be able to borrow from any lender again
  3. You salvage your business and such comes at a steep price
  4. People lose trust in you and financial institutions wouldn’t want to lend you money again.

Conclusion 

You should read the fine print carefully before working with this agency. Debt settlement plans can come with serious stipulations. Just as losing weight takes time, so does getting out of debt. But diligence can make it happen. Don’t fret if you need to make adjustments along the way or if you slip up. The answer is not to do a quick fix, but to change your attitudes and behaviors to realize your financial goals.

Watu Kenya Loan- How To Get A Loan From Watu Credit

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In today’s challenging economy, the need for additional income sources has become crucial. The salary that once sustained individuals seven years ago is no longer sufficient, leading to a surge in self-employment, entrepreneurship, and small business ownership.

Watu Credit is a game-changer, empowering people through asset financing. They offer aspiring business owners the opportunity to own motorcycles, and three-wheelers (tuk-tuks), among other loan products, delivered efficiently and professionally.

This post covers everything you need to know about Watu Credit—its offerings, benefits, application process, interest rates, loan limits, and a comprehensive FAQ section to address all your questions.

Let’s delve in!

About Watu Credit 

Before diving into the application process, let’s get acquainted with Watu Credit

Watu Credit, more than just a lender, is a FinTech company on a mission to revolutionize financial inclusion across Africa, with a strong presence in Kenya, having 25 branches across the country. Their focus lies on empowering the unbanked and underserved population by providing them with the assets and resources they need to thrive.

Here’s what sets Watu Credit apart:

  • Asset-Based Financing: Watu Credit prioritizes asset-financing solutions, meaning they provide loans for specific assets like motorcycles and business equipment. This approach can be beneficial as it reduces risk for both borrower and lender.
  • Financial Literacy Advocate: Watu Credit understands the importance of financial education. They actively promote financial literacy programs to empower their clients and equip them to make informed financial decisions.
  • Reaching the Underserved: Watu Credit prioritizes serving the unbanked and those with limited access to traditional financial institutions. Their services are designed to be accessible and cater to a broader range of Kenyans.

Watu Credit offers a variety of loan solutions, including Asset Financing for vehicles and equipment, Group Lending for short-term business needs, and Watu Simu for smartphone financing.

It takes pride in offering fully cashless services for both loan disbursement and collection, as well as 24-hour access for clients to their account balances.

How to Apply for a Watu Credit Loan 

Applying for a loan from Watu Credit can be a relatively straightforward process. You should know that it is a fully physical activity and you cannot apply online. Here’s a breakdown of the steps involved:

1. Choose Your Loan Product:

Watu Credit offers various loan options depending on your needs. Familiarize yourself with their offerings (e.g., Watu Gari for vehicle financing, Watu Simu for smartphones) and choose the program that best suits your requirements.

2. Check Eligibility:

Each loan program might have specific eligibility criteria. Ensure you meet the basic qualifications before proceeding with the application.

3. Gather Required Documents:

The necessary documents may vary depending on the loan type, but these should form the base of the needed documents:

  • National ID/Passport
  • KRA PIN copy
  • Passport photograph
  • Proof of income (6-months bank statement)
  • Completed application form

4. Visit a Branch:

Watu Credit has over 25 branches in Kenya. Visit the Watu Credit branch closest to your location and submit the application form.

5. Await Approval:

Once you submit your application and documents, Watu Credit will review your request. The waiting time for approval can vary. They might contact you for further information if needed.

6. Loan Disbursement and Repayment:

If approved, Watu Credit will offset your payment for the asset, this is because Watu does not offer cash. They’ll also provide details on your repayment schedule and the preferred methods for making payments.

What are the Requirements for one to get Financing from Watu?

To qualify for a loan at Watu, they require one to have:

  1. Valid National ID of both the Borrower and the guarantor
  2. KRA PIN Certificate
  3. Age 20 to 65 is the normal age. But from 18 to 19, must come with their parents.
  4. They require 1 Guarantor aged 20 years and above
  5. Need to make a down payment of Ksh. 10,000 for Motorbike financing and 50,000 for tuk-tuk financing
  6. A valid 6-month Safaricom phone number.

How Long Does it Take to Get My Motorbike/Tuk-tuk Once I Complete the Application?

It takes just 2 hours to apply and get a motorbike/tuk-tuk upon application. However, in case of unforeseen circumstances leading to delay, the front office officer guiding you will notify you of the date.

Watu Credit Motorbike Financing

Does Watu Credit Offer Cash Loans?

While Watu Credit excels in providing financial solutions, their offerings are cashless and lean more towards asset-based financing. This means they focus on loans tied to specific assets you purchase, rather than direct cash deposits.

The company offers credit tailored towards helping people purchase the 2 wheeler(Boda Boda) and the 3-wheeler Tuk-tuks .

To get a Boda boda through Watu Credit, you need to make a down payment of Ksh 20,000. The down payment for getting a Tuk-tuk is Ksh 50,000.

How do I check my Watu credit balance?

What is Watu’s Pay Bill Number for Weekly Repayments?

The official Watu pay bill number for weekly repayments is 650880. They do not accept cash payments.

How to Repay Watu Credit Loan

In repaying Watu Credit, follow the steps below:

  1. Login to your M-Pesa account 
  2. Select Lipa na M-Pesa
  3. Choose pay bill 
  4. Enter the pay bill number 
  5. Use your phone number as your account number 
  6. Input the amount you want to repay 
  7. Cross-check all necessary details 
  8. Press the submit option to submit it
  9. Get a message proving a successful repayment of your loan

Watu Credit Offices in Kenya

  1. Meru: Njuri Ncheke Street, Meru, Kenya
  2. Kitui: Kibwezi – Kitui Road
  3. Mombasa Road: Vision Plaza, Nairobi, Kenya
  4. Nakuru – Eldoret highway, Nakuru, Kenya
  5. B3 Road: Narok, Kenya
  6. Tengecha Lane: First Floor, Room 101, Kericho, Kenya.
  7. Silibwet Junction: Bomet, Kenya
  8. Pioneer Business Center: Kisumu Road, Eldoret, Kenya
  9. Jean-Marie Seroney Road: Kapsabet, Kenya
  10. Kitale: Mak Asembo Street, Kitale,Kenya
  11. Kisumu: Makasembo Rd, MURBS Building, Kisumu,Kenya
  12. Kakamega: Kisumu-Kakamega Road, Kakamega, Kenya
  13. Kisii: Kisumu Migori Road, Metro Hotel Ground Floor, Kisii, Kenya
  14. Bungoma: Opposite Bungoma Governor’s Office Gate, Bungoma, Kenya
  15. Voi: Car and General Voi, Voi, Kenya
  16. Mumias: Mumias musanda Road, Mumias, Kenya
  17. Migori: A1 Road, Migori, Kenya
  18. Homabay: A1 Road, Migori, Kenya
  19. Siaya: Ragama Building, Siaya, Kenya
  20. Malindi: B8 Road,Malindi, Kenya
  21. MbaleKaburu Complex: Maua, Kenya

Conclusion

Watu Credit Limited is a micro-finance institute emerging as a specialised sustainable and inclusive finance. Part of their mission is also to share and contribute to the sustainable development of the economy.

They provide access to capital to the benefit of micro, small, and medium enterprises. In serving customers well they contribute a focused value, principles of independence, integrity, and transparency. 

Frequently Asked Questions

How do I check my balance on Watu?

There are two ways you can check your loan balance on Watu. The first is:

  • By dialing *876# and following the instructions. Ensure you are using your registered phone number. Note that standard SMS/call rates charged by your mobile service provider may apply on checking the balance.
  • You can visit any of Watu’s branches to check your balance or call 09011117770.

What is Watu credit Paybill number?

The Watu credit Paybill number for weekly payments is 650880. This paybill number is used through M-PESA, Tigo Pesa, and Airtel Money.

How do I contact Watu Credit?

To contact Watu Credit, you can use the following contact information;

Phone Numbers: +254 790 000 999 or +25 709 739 000, +254 719 111 000.

Email address: info@watucredit.com. 

Prime Bank Kenya- Everything You Need To Know

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Prime bank Kenya is a leading commercial bank, providing a wide range of loans, commercial and retail banking services through a network of over 20 branches spread across counties in Kenya and other countries.  

Prime-Bank-Kenya

About prime bank Kenya 

They founded prime Bank on 3rd September 1992 as a privately held commercial bank, serving small and medium sized enterprises. It is licensed by the Central Bank of Kenya, the national banking regulator. 

Prime bank is Kenya’s market leader in the banking industry, with a range of products and services unmatched by other banking institutions.

While these products and services are innovative and attractive, they recognize that they also reflect the rigorous and well thought out mechanisms put in place to manage and protect the interests of their valued customers.

How many branches do Prime bank have

It has a total of 146 branches across the country and 20 interconnected branches in Kenya’s urban cities.

Prime bank Kenya loan products 

Prime bank is among the leading banks in Kenya offering retail and corporate banking solutions. They provide their customers with a wide array of financial products and services that include:

  1. Consumer/individual loan
  2. Mortgage loans
  3. Small business loans and
  4. Large scale business lending 

How to apply for Prime Bank Kenya loan

To apply for a Prime bank Kenya loan, visit any branch close to you and get the loan application form and follow the due process.

20 Prime bank branches in Kenya

Prime bank offers a wide range of loans and banking services in different locations in Kenya and they include:

  1. Aside plaza, Ring Road Kilimani, Nairobi city, Kenya
  2. PRQC+JMP, Nairobi, Kenya 
  3. Mombasa Rd, Nairobi City, Kenya 
  4. No 10, Nairobi, Kenya 
  5. First flow  Diamond plaza, Masari Rd, Parklands, Westlands, Kenya
  6. Yaya Center, Argwings kodhek Rd, Nairobi, Kenya
  7. Ukwala Rd, Nairobi, Kenya 
  8. Kenyatta Hwy, Thika, Kenya
  9. Makasembo Rd, Eldoret, Kenya
  10. Malaba Rd, Eldoret Kenya
  11. Opposite Mombasa Law Courts, Kizingo, Dedan Kimathi Ave, Mombasa, Kenya
  12. 2MW3+MJR, Meru, Kenya
  13. Krishna Center, Woodvale Grove, Kenya
  14. Nyali Plaza, Opposite Nyali Cinemax, Nyali Rd, Mombasa, Kenya
  15. Westside Mall, Kenyatta Ave, Nakuru, Kenya
  16. Next To Mukeshi R. Lakhani, Oginga Odinga Rd, Kisumu, Kenya
  17. Links Rd, Mombasa, Kenya
  18. Krishna Centre, Woodvale Grove, Nairobi, Kenya
  19. Two Rivers mall, QQQV+GRF, Nairobi, Kenya
  20. Nairobi tow, Kenya (+254 20 4203000)

Subsidiaries of Prime Bank

The following are the bank investments:

  1. Prime Capital and Credit Limited 
  2. Tausi Assurance Company Limited 
  3. FMBCapital Holdings Plc in Mauritius.

Conclusion

Prime bank Kenya is located in Nairobi’s Central Business District. The bank provides the required banking services and loans to the public so that they can achieve their financial independence. They also strive to provide quality banking and loan products made for its clients.

Loan Application And Agreement Form – What You Should Know

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Loans aren’t always a bad idea if you go about it right. Technology has revolutionized loans, making them accessible with a few taps on your phone. Our goal is to educate you on loan application and agreement forms and how to write a simple loan agreement.

What is a Loan Agreement?

Informally, a loan agreement is a contract between two parties – a lender and a borrower defining the conditions of the loan. In the event that one of the parties fails to fulfill their obligations, the other party may enforce the loan conditions in court.

In return, the borrower promises to repay the lender the loan at a later date, possibly with interest. Moreover, the lender cannot suddenly decide not to lend money to the borrower, especially if the borrower made a purchase with the expectation of receiving money soon from the lender.

What is a Loan Agreement Form

A Loan Agreement is a document that is signed between two parties that want to get into a transaction involving a Loan. The loan agreement document is signed by a Lender (the individual or company giving the loan) and a Borrower (the individual or company receiving the loan).

Loan application 

A loan application is a procedure for obtaining a loan. Applicants for a loan use loan applications to request financing. Borrowers reveal key information in their loan applications. An application for a loan is critical to determining whether the lender will approve the loan or not.

what should be included in a loan agreement form

What should be included in a loan agreement?

  1. Details of the borrower 
  2. About the lender
  3. Loan amount 
  4. Interest rate
  5. Repayment date and duration 
  6. Collateral 
  7. Late charges
  8. Other fees like origination fees, legal fees, insurance fees, etc.
  9. Prepayment for a discount
  10. Governing law in case there is a problem with the agreement 

Personal Loan Agreement form template 

The loan agreement sample below details an agreement between a borrower and a lender. The lender agrees to give the borrower a loan, who agrees to pay back the loan according to the conditions specified.

How do I write a simple loan agreement?

Here are 6 easy steps to writing a personal loan agreement:

  1. In starting the Document, write the date at the top of the page. 
  2. Write the terms of the Loan and state the purpose of the personal payment agreement and the terms for returning the money. 
  3. Date the Document of Agreement
  4. Sign the Document
  5. Record the Document

Who Needs a Loan Agreement?

  1. Borrower 
  2. Buyer of a home
  3. Buyer of a car
  4. Seller of a home or a car
  5. Investors 
  6. Business men
  7. Family members 

When To Use a Loan Agreement Form

Often, relying on only a verbal promise can result in one person falling short. A written agreement can specify a loan’s terms and the amount of interest owed by the borrower. 

Here are some situations where you may need a Loan Agreement:

  1. Starting a business and need a capital loan
  2. Purchasing land or a home with a real estate loan
  3. Investing in a higher education or repaying a student loan
  4. Buying a new car or boat for personal reasons
  5. An employee loans from their employer
  6. Helping a friend or family out with a personal loan

Sample loan agreement in Kenya

The loan agreement template in Kenya addresses the following details:

  1. Who: The borrower and the lender, or the person taking money and the person giving money
  2. What: The amount of money or “principal” that is being borrowed, and whether interest or a percentage of the principal is also owed
  3. When: The duration of the loan or date the principal and any interest should be repaid back to the lender.

Conclusion 

Borrowing money could be one of the best decisions you ever make. Those trying to apply for a loan often do not know how to go about it. In contrast to traditional loan applications at banks that take a lot of time and are filled with procedures, online applications are far easier. Find out how to write a loan agreement, how to complete a loan application, and when to use a loan agreement form. With all these, you are good to go.

Ipesa Loan Review – What you should know

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Ipesa offers instant loans without collateral.  Ipesa loan review is what this article targeted, and we discovered it is one of the best loan lender apps in Kenya. They provide quick loans to the citizens, both salary earners and business owners. Just be sure that you have a good credit score and proceed for the loans.

We will review Ipesa loans and we believe that all the information gathered will do a lot for you.

About Ipesa loans

Ipesa loan is owned by Osome Fintech Company, whose office is in Kenya. It is among the best and leading financial apps in Kenya. They are currently receiving a lot of positive reviews, rating and good accolades online. The system uses algorithms to track your creditworthiness. It scans your mobile phone information to determine your readiness to repay loans on time.

What you need to know about Ipesa loans

Ipesa uses data on your phone to verify your identity to make lending approval decisions. Follow a few steps and you are ready to be a beneficiary of Ipesa loans. The steps are:

  1. Download and install the app on your mobile
  2. Create an account on the app
  3. Enter your details where necessary 
  4. View your loan limit. You can apply immediately if you wish
  5. Loan disbursement is directly paid into your M-Pesa account 
  6. Make early repayment and increase your loan limits.

Minimum and maximum Amount to borrow 

The minimum amount to borrow ranges from ksh.500 to Ksh.50,000. Repayment duration also ranges from 91 days to 180 days. In addition, Ipesa maximum APR on loans is 36%.

How to get Ipesa loans

To get Ipesa loans, follow the procedures below:

  1. Download the app on google play store
  2. Create an account with your Safaricom phone number 
  3. Input all your personal information 
  4. View the loan amount you qualify for and fill the application form
  5. Select your loan repayment duration 
  6. If approved, you will receive your loan within minutes.

Interest rates for Ipesa loans

For a loan duration of 14days, Ipesa will charge you 15% taking so many factors into consideration. Their average interest rate is 12% APR. They also have 0% service charge. The charges also depend on your repayment history and lending cost.

Ipesa loan requirements 

To obtain loan through Ipesa, you have to provide the following requirements;

  1. Posses a Safaricom phone number linked to your M-Pesa account 
  2. Have a national ID
  3. Open an M-Pesa account 
  4. A smart android phone 
  5. Be willing to grant Ipesa access to read your phone data.

Ipesa loan app

Features of Ipesa loan app range from:

  1. 23,067 reviews on Google play store
  2. 4.2 star ratings
  3. Has over 1million downloads on Google play store 
  4. Memory space of 7.0MB.

Benefits of Ipesa loans

The various things you would gain why using Ipesa app are:

  1. No sort of hidden  or secret extra charges 
  2. They do not need collateral or any form of documents 
  3. You data and processed information is secured
  4. They have good customer support team
  5. As you pay up your loan, you can borrow up to Ksh. 50,000

How to repay Ipesa loans

Follow through the steps on how to repay your Ipesa loans;

  1. Launch your M-Pesa account 
  2. Choose lips na M-Pesa and select paybill 
  3. Input paybill number as 192010
  4. On the account number section,  enter only your M-Pesa number linked to your account 
  5. Type in the amount you wish to repay
  6. Enter your M-Pesa pin
  7. Confirm details you provided press Ok
  8. Receive SMS for successful repayment 

Frequently asked questions and answers

What should I do when my payment does not reflect. 

When payment is made and it doesn’t reflect,  contact the customer care immediately.  Note down your transaction information. Wait for few hours to get feedback. 

What happens when I overpay 

Try as much as possible to contact the support team. They will work on your account and reconcile all excesses and deposit it to your M-Pesa account within  15 days.

What happens during late repayments

2% fee is charged per day on the principal amount. You are urged to repay your loans early so as not to exceed the due date. Exceeding the due date will lower your creditworthiness. 

Example: 

Assuming you borrowed Ksh. 1000 to pay back within 180 days and you exceeded with a week, you will pay the following:

Interest: 1000 x 12% = Ksh. 120

Penalty: 1000 x 2% x 7days = Ksh. 140

Total Amount = Principal + interest = penalty

= 1000 + 120 + 140 = Ksh. 1,260

This is what the analysis looks like but you can avoid all of these if you try as much as possible to repay early.

When you don’t repay early your name and other details will be forwarded to the Credit Reference Bureau (CRB). It will affect your next borrowing and you won’t even be able to borrow from other lending app.

Can I request to repay later aside from the date.

The answer is No. Start early to pay in bits so you can pay off all debt before the duration date. Avoid borrowing amount that you can’t repay

How to contact Ipesa loans

To contact Ipesa loans, reach them out on their customer care service on +05488888888. You can also email them at help@ipesa.cc. Contact them on Facebook @ Facebook page: https://www.facebook.com/iPesaKenya/

You can also visit their office at: ADLIFE PLAZA, CHANIA AVENUE, NAIROBI.

Conclusion 

Ipesa is one of the best lending apps in Kenya, they take loan repayments with utmost importance. As a result, endeavour to repay your loan as at when due to avoid any sort of penalties. Your loan limit also progresses as you borrow and repay early. It is a convenient, easy, fast, and reliable lending agency. Besides, the steps taken to borrow loans are quick.

10 Mortgage providers in Kenya (2024)

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Mortgage providers in Kenya are digital platforms that provide a broad range of professional services, including mortgages to individuals and corporates, loan consultations, and legal advice.

They are offered by banks, building societies, and non-bank financial institutions. Let us explore 10 mortgage providers in Kenya in 2024

What is a mortgage?

Simply put, a mortgage is a long-term loan given to help you buy a house. Financial institutions offer the products, including banks, microfinance agencies, SACCOS, and building societies.

What you need to get a mortgage loan in Kenya

When getting a mortgage, providers will explain all you need to qualify and be eligible for the loan. Listed below is a mortgage checklist you will need to complete.

  1. A carefully signed mortgage application form
  2. Original copies of your identification documents like your ID or Passport
  3. An introduction letter from your employer (This is for the employed)
  4. 3 months’ payslip
  5. 6 months certified bank statement 
  6. Letter of offer or a sales agreement (when you are looking to purchase)

10 mortgage providers in Kenya

Here are some of the top mortgage providers in Kenya, and what they charge as the average annual interest rate. You might want to check them out when looking to buy your dream home.

BankInterest Rate (p.a.)Maximum Repayment Period
1. Standard Chartered18%20 years
2. Citibank Kenya12.5%20 years
3. Commercial Bank of Kenya12.9%Not specified
4. KCB Bank9%25 years
5. NIC Bank Kenya14.1%20 years
6. CFC Stanbic Bank Kenya14.4%10 years
7. Barclays Bank of Kenya14.4%25 years
8. Co-operative Bank9.9%20 years
9a. Consolidated Bank (Residential)9.87%15 years
9b. Consolidated Bank (Commercial)11.87%15 years
10. Housing Finance Group9.5%20 years

Ownership of mortgage 

In the event of a mortgage, they split ownership into two, which are:

  1. Equity: What you owe as an individual or a business
  2. Debt: This is what the bank owns 

As a result, when you make mortgage payments, you buy more equity and you own the property in the end.

What do mortgage providers consider 

Mortgage providers look at a lot of things before taking you through the process. Much like any other loan product (loan app or not), the lender will look at:

  1. Your credit score
  2. The home price and the loan amount,
  3. The down payment,
  4. The loan term, and
  5. The loan type 

Types of mortgages in Kenya

In Kenya, there are two types of mortgages, they are:

  1. Fixed-rate mortgage and
  2. Adjustable rate mortgage

Fixed-rate mortgages 

In this type of mortgage, the interest rate is fixed till the whole repayments are done. It is more expensive because the amount remains the same during the lifetime of the loan.

Adjustable rate mortgage

The interest rate in this type of mortgage keeps changing depending on the market structure. The loan repayment keeps reducing. It is the most common type of mortgage operated in Kenya.

The reason for the changes in the interest rate is because they transfer the part of the risk of the loan to the borrower.

Read also all you need to know about the 5c’s of credit.

Conclusion 

A mortgage is a loan that enables an individual to buy the house of their dreams. Getting a mortgage is even more rewarding when you can take advantage of competitive interest rates and flexible payment plans.

Mortgage providers in Kenya provide home loans for both commercial and residential properties.