Whether it is to bridge a gap in your business finances, finance a large order, or take care of an emergency financial need at home, a fast loan can save the day. But the process to apply and get approved for a loan is traditionally a long and frustrating one.
If it’s not the all-important collateral to secure the loan or a chequered credit history, it is the many documents you have to submit. Especially when loan-shopping at the big traditional banks, many usually quit before they have even started.
The good news is the loan market has changed rapidly in the last few years with the entrance of new players keen to make the process of getting a loan easier and faster and take business away from traditional lenders.
In this article, you will discover the 5 best loan apps in Kenya in 2023. We will explain why we feel they are the best options for accessing credit online.
Let's dive right in.
The Kenyan banking sector is dominated by a few large commercial banks, including Equity Bank, Absa Bank, Co-operative Bank, Standard Chartered Bank, and KCB Group.
These banks offer a range of loan products, including personal loans, mortgages, and business loans through mobile loan apps in Kenya. However, these loans can be difficult to access for some borrowers, especially those with limited collateral or poor credit history.
In recent years, there has been an increase in the number of alternative lending options available in Kenya. One such option is microfinance institutions, which offer small loans to individuals and small businesses.
Loans offered by micro-lenders are often targeted at low-income borrowers who may not qualify for loans from traditional banks. Microfinance institutions in Kenya include KWFT, Faulu Kenya, and Jamii Bora.
Online lenders have also emerged as an alternative lending option in Kenya. These lenders use digital platforms to assess loan applications and disburse funds, making it easier for borrowers to access credit. Some of the leading online lenders in Kenya include Branch, Tala, and Okash.
There are also a number of peer-to-peer (P2P) lending platforms in Kenya, which allow individuals to lend money directly to other individuals or small businesses. P2P lending platforms in Kenya include Lentera, LipaLater, and Zidisha.
Kenya has also seen a significant increase in the online loan industry in recent years, with various fintech companies offering digital lending services to consumers and small businesses.
These platforms make credit more accessible for borrowers, who can apply for loans using mobile apps, often getting approved and disbursement quickly.
The growth of the online loan industry in Kenya has been fueled in part by the increasing use of mobile phones and other digital devices, which has facilitated access to financial services online.
Keen to spur economic growth by improving access to credit, the government has also supported the development of the fintech sector through regulatory changes and the creation of a dedicated fintech task force.
But with so many online loan apps available in Kenya, it can be difficult to know which one is the best fit for you. To help you make an informed decision, we've compiled a list of the best lending apps in Kenya in 2023, highlighting their key features and attributes.
Tala is a leading online loan app in Kenya that offers personal loans of up to KES 50,000. One of the key features of Tala is its fast loan disbursement process, with borrowers receiving their loans within minutes of approval.
To apply for a loan on Tala, borrowers simply need to download the app and complete an online application form. Tala uses a variety of data points, including phone usage patterns and social media activity, to assess the creditworthiness of borrowers.
One of the advantages of Tala is its user-friendly app, which makes it easy for borrowers to track their loan status and make payments. Tala also has a transparent pricing structure, with no hidden fees or charges.
Interest rates on Tala loans are determined based on the borrower's credit profile and loan amount, with rates ranging from a low of 9% to a high of 25%.
Tala offers flexible repayment terms, with borrowers able to choose from weekly, biweekly, or monthly repayment schedules. And as long as borrowers pay back on time, they can keep borrowing. In fact, those that repay on time unlock higher loan limits and more interest rates.
Branch is another popular online loan app in Kenya that offers personal loans of up to KES 70,000. Serving a multi-national clientele, the micro lender has achieved over 40 million mobile app downloads across Africa and India.
One of the unique aspects of Branch is its use of artificial intelligence to assess the creditworthiness of borrowers. This allows Branch to offer competitive interest rates and flexible repayment terms to deserving borrowers.
To apply for a loan on Branch, borrowers simply need to download the app and complete an online application form.
One of the advantages of Branch is its quick loan disbursement process, with loans typically disbursed within a few hours of approval.
Branch also has a user-friendly app, which makes it easy for borrowers to track their loan status and make payments.
Interest rates on Branch loans are determined based on the borrower's credit profile and loan amount, with rates ranging from a low of 15% to a high of 25%. Branch offers flexible repayment terms, with borrowers able to choose from weekly, biweekly, or monthly repayment schedules.
M-Shwari is a digital banking service offered by the NCBA Bank in partnership with Safaricom, one of Kenya's largest mobile network operators.
In addition to offering traditional banking services, such as savings accounts and money transfers, M-Shwari also offers personal loans of up to KES 50,000.
To apply for a loan on M-Shwari, borrowers must have an M-Pesa account and be Safaricom subscribers.
M-Shwari has widespread availability, as it can be accessed by any Safaricom subscriber with an M-Pesa account. Again, interest rates on M-Shwari loans are determined based on the borrower's credit profile and loan amount, with rates ranging from a low of 14% to a high of 22%.
KCB M-Pesa is a joint venture between Kenya Commercial Bank (KCB) and Safaricom that offers a range of financial services through the M-Pesa mobile platform.
In addition to traditional banking services, such as savings accounts and money transfers, KCB M-Pesa also offers personal loans of up to KES 100,000.To apply for a loan on KCB M-Pesa, borrowers must have an M-Pesa account and be Safaricom subscribers.
One of the key benefits of KCB M-Pesa is its strong network of physical branches and agents, which allows borrowers to access loans and other financial services in person if that is more convenient to them.
KCB M-Pesa also has a user-friendly app, which makes it easy for borrowers to track their loan status and make payments.
Interest rates on KCB M-Pesa loans are determined based on the borrower's credit profile and loan amount, with rates ranging from a low of 14% to a high of 22%.
KCB M-Pesa offers flexible repayment terms, with borrowers able to choose from weekly, biweekly, or monthly repayment schedules. In addition to personal loans, KCB M-Pesa also offers business loans for small and medium-sized enterprises.
Faulu Mobile is a digital banking service offered by Faulu Microfinance Bank in Kenya. In addition to traditional banking services, such as savings accounts and money transfers, Faulu Mobile also offers personal loans of up to KES 50,000.
To apply for a loan on Faulu Mobile, borrowers must have a Faulu Mobile account and be registered Faulu customers.
One of the standout features of Faulu Mobile is its focus on financial education and empowerment, with resources and tools available to help borrowers manage their finances and improve their creditworthiness.
Faulu Mobile has a user-friendly app, which makes it easy for borrowers to track their loan status and make payments.
Interest rates on Faulu Mobile loans are determined based on the borrower's credit profile and loan amount, with rates ranging from a low of 15% to a high of 25%. Faulu Mobile offers flexible repayment terms, with borrowers able to choose from weekly, biweekly, or monthly repayment schedules.
The apps we have discussed above can all lend you money in Kenya. But access isn’t the only challenge you have to deal with. Below we discuss other issues that hold the loan apps industry back and which you have to be aware of as a borrower.
While the increasing number of online lenders in Kenya has improved financial inclusion and access to credit, there have been concerns about high-interest rates charged by some lenders and the potential for borrower overindebtedness. Let’s explore some of these challenges below;
A pressing challenge in the online loan industry in Kenya is the issue of data privacy and security. Because borrowers are required to share their personal and financial information with online lenders, there is a risk that this information could be misused or stolen. This can be a concern for borrowers who may be hesitant to share their information online.
Online lenders need to implement strong security measures to protect the data of their customers. This includes creating a secure website to store the borrower’s information. Having a secure website with strong encryption will protect the data and allow online lenders to provide quick and easy access to the borrower.
The online lending industry in Kenya is also affected by poor regulation. Because the industry is relatively new, there are not yet clear rules and guidelines in place to govern the activities of online lenders.
Inadequate regulation can create uncertainty for both lenders and borrowers and make it more difficult for consumers to protect their rights if something goes wrong.
It's important for the industry to work within a robust regulatory structure so that lenders and borrowers can operate in a fair and transparent manner. This is something online lenders in Kenya have to work hard to achieve to give borrowers the peace of mind they need, knowing that the lender they’re dealing with is properly regulated.
Thankfully, the Central Bank of Kenya introduced a set of new regulations for digital credit providers on March 18, 2022. According to the statement, “The new regulations, which are now operational, provide for the licensing and oversight of previously unregulated Digital Credit Providers (DCPs) by CBK.” The new regulations can be found here.
Short-term borrowers looking to secure loans from loan apps also have to deal with high-interest rates. Some online lenders charge very high rates, which can make it difficult for borrowers to repay their loans.
High-interest rates can also lead to overindebtedness, where borrowers take on more debt than they can afford to repay.
It's important for online lenders to charge fair and reasonable interest rates so that borrowers are not taken advantage of. Sometimes, borrowers are forced to take loans from one app to pay the other due to very high-interest rates, which, again, can be avoided if every loan provider offers competitive interest rates.
Many people in Kenya do not have a formal credit history, which can make it difficult for them to access credit. A credit history is a record of a person's borrowing and repayment activities that is used by lenders to assess the creditworthiness of potential borrowers.
Without a credit history, lenders have no way of knowing whether a borrower is likely to repay a loan, so they may be hesitant to lend to them or may charge higher interest rates to compensate for the added risk.
The growing presence of online banking in the country can help curb this as it will give more people access to financial services, giving the lender a better idea of the borrower's credit history before giving out loans.
While the online loan industry has expanded access to credit in Kenya, there are still many people who do not have access to formal financial services and are unable to borrow from traditional banks or other lenders.
This is often because they do not have the necessary documentation or collateral to qualify for a loan, or because they live in areas that are not served by formal financial institutions.
It's important for online lenders to make credit available to a wide range of borrowers so that more people can benefit from the financial opportunities that credit can provide.
The online lending apps industry in Kenya is becoming increasingly competitive, with many new entrants entering the market. This can lead to price wars and pressure on lenders to offer lower interest rates, which can make it more difficult for them to sustain their business.
It's important for online lenders to find ways to differentiate themselves from their competitors and offer value to their customers so that they can remain competitive in the market.
Tala is widely accepted as the most efficient loan app in Kenya. With a user-friendly mobile app that makes it easy for borrowers to track their loan status and make payments, Tala loans are disbursed and accessible within minutes of getting approved.
There are several lenders that offer loans through mobile apps. The top loan apps in Kenya include Tala, Branch, M-Shwari, KCB M-Pesa, and Faulu.
To borrow money online in Kenya, you have to choose among the many loan apps that are available. Once you decide on a lender, you have to download the mobile app, register an account, and verify your phone number. You will also have to give the app a few minutes to build up your credit profile as well as answer a few questions so the lender understands your credit needs.
Tala is one of the fastest loan apps in Kenya. While other approvals can take longer, a Tala loan can be approved within minutes and disbursed soon after.
One issue that affects borrowers in Kenya is the slow disbursement of loans. This can be frustrating for borrowers who are relying on the loan to meet a financial need or who have made plans based on the availability of the loan.
Online lenders can solve this challenge by making use of better-quality payment APIs. Through IntaSend, for example, a lender can take advantage of our bulk payments service and disburse loans to a large number of approved borrowers at once.
Sometimes online lenders are inundated with a flood of loan requests but have inadequate infrastructure to disburse the loans on time. The task is almost impossible without a good payment API, which is what IntaSend offers.
Through IntaSend, payments can be disbursed through credit and debit cards, mobile wallets, and bank deposits. IntaSend has done all the hard work. All there is to do is easily integrate the payment API into your system. You can read more about the IntaSend payment API here.
On your end as a business, once you receive your loan, IntaSend makes it easy to pay your suppliers, vendors, and employees in bulk and avoid interruptions to operations. IntaSend has tools and APIs that make it easy to make payments, request and receive payments from your customers, as well as to accept payments on your website.
Sign up with IntaSend today and receive, accept, and make payments faster and securely.