Interest-Free Business Loans in Africa

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In Africa, small business sector makes a significant contribution to poverty reduction and economic growth. Securing loans to grow your business can be tricky since banks are not always willing to lend to young companies or businesses with little to no revenue track record or credit history. However, this should not be a setback to African entrepreneurs since there are several alternative financing options available.

Zidisha Interest-Free Loans for Businesses

Zidisha is an international lending community that offers international business loans for small businesses in Africa. It allows entrepreneurs to raise loans directly (without intermediaries) from ordinary people all over the world. To borrow from the platform, you will first need to apply to join Zidisha where you will need to provide your residential address, telephone number, and national ID number. Entrepreneurs are required to verify their online identities by linking an active personal Facebook account to their Zidisha account. Applicants also need to provide personal references and contact information for a local community leader who can recommend them. Entrepreneurs can reach Zidisha through web searches, blogs, or Facebook posts.

Eligibility Requirements

To qualify for a Zidisha loan, applicants must;

  • Be at least 18 years of age.
  • Have a good reputation and have the support of family, neighbours and a local community leader.
  • Have an active business or employment with sufficient income to facilitate loan repayment.
  • Not currently hold any overdue loans from other lending sources.
  • Have a smartphone with the Zidisha app installed and have access to an internet connection.
  • Be able to post frequent updates regarding the use of the loan and the progress of the business funded.

New members start with a small test loan to build creditworthiness. The amounts you borrow afterwards will increase with each on-time loan repayment you make up to a maximum of 10,000 USD per loan. Zidisha loans are interest-free. To cover the cost of transferring and administering the loan, borrowers pay a service fee of 10% of the loan amount. Apart from this service fee, loans also carry a credit risk payment ranging from 5% to 15% used for reimbursing lenders in the event of default.  However, the credit risk payment decreases when you continually make on-time repayments. In Africa, Zidisha offers loans to residents of Kenya, Zambia, Nigeria, and Ghana.

Kiva Interest-Free Loans for Businesses

Kiva is an interest-free online micro-lender founded in 2005 in San Francisco with a mission to expand financial access to help underserved communities grow.  The organization gives loans in more than 80 countries on 5 continents that are often financially excluded and can’t access other sources of credit. Kiva does not charge interest on borrowed loans, and lenders on the platform do not also receive interest from loans they fund. However, many Kiva Field Partners charge some interest to borrowers to achieve self-sustainability.

Kiva provides loans in Kenya, Tanzania, Senegal, Uganda, Nigeria, Zambia, Ghana, Togo, Mali, Cameroon, Zimbabwe, Egypt, Ivory Coast, Namibia, Burkina Faso, Malawi, Sierra Leone, Liberia, Mozambique, Rwanda, and Congo.

How Kiva Loans Work

The Kiva loan process is as follows:

A Borrower Applies for a Loan

Kiva loans are facilitated through partner or direct models. For partner loans, applicants apply to local Field Partners who manage the loan whereas, for direct loans, applicants apply through the Kiva website.

Kiva Loan Goes Through the Approval Process

Local non-profits or lending institutions approve loan requests and Kiva does due diligence and ongoing monitoring for each Field Partner. Kiva approved trustees approve direct loans.

The Loan is Posted to Kiva for Lenders to Support

A Field Partner or the borrower uploads the loan details into the system. Volunteers help to edit and translate the loans before they go live on the website for lenders to support.

Borrowers Repay the Loans

Lenders receive loan repayments based on the given repayment schedule agreed upon. The repayments go into the lenders’ Kiva accounts. The lenders can use the repayments to fund new loans or withdraw the money.

Babyloan Interest-Free Loans for Businesses

Babyloan is a crowdfunding platform through which micro-entrepreneurs borrow loans through field microfinance partners legally registered in their country of operation.  Entrepreneurs post projects that need financial support on the Babyloan platform. Lenders search and choose the project(s) to support by country or sector, and they decide on the amount of money they wish to lend from €10 to €4,000.  The lenders will pay an additional fee apart from the amount they wish to lend. This fee is necessary for Babyloan to function and deal with the money transfer processes. When the entrepreneur repays the loan, lenders can decide to either withdraw their money to their bank accounts or lend the amount again.

Babylon lends interest-free loans to entrepreneurs in Benin, Uganda, Morocco, Kenya, Mali, and Togo to grow their businesses.

Lendwithcare Interest-Free Loans for Businesses

Lendwithcare is a microfinance lending website from the development charity CARE International UK launched in September 2010. It allows individuals or groups to make small loans to entrepreneurs to grow their businesses in developing countries through partner microfinance institutions (MFIs). Lendwithcare does not charge any interest on loans made to entrepreneurs, but MFIs charge fair interest rates to facilitate their services.

Entrepreneurs present their business plan or idea, and when the MFI is happy with it, they approve the loan proposal and provide the initial loan requested. The MFIs also help entrepreneurs set up profiles for Lenders will browse through entrepreneurs’ profiles on the website and then choose an entrepreneur to support.

Once a loan is fully funded, the money is transferred to the MFI to replace the initial loan already paid out to the entrepreneur. Benefiting entrepreneurs give updates on their business’ progress to the lenders. Upon loan repayment, the MFIs transfer the money to CARE International who then deposits it into their accounts. Lenders can decide to either loan out the money to another entrepreneur or withdraw it.

Lendwithcare supports entrepreneurs in Togo, Kenya, Nigeria, Zimbabwe, South Africa, Uganda, Zambia, Rwanda, Malawi,  and Benin. Supported countries may vary in each financial year.

Business Loans from The Goodvestment by Project GAIN


The Goodvestment is a form of crowdfunded investment to help micro-entrepreneurs in developing countries to grow their businesses and lift them out of poverty by making them financially self-sustainable. Most poor people in Africa are self-employed or run small businesses; thus, Project GAIN assists them in applying for small loans. Project GAIN, together with their development aid partners also provide education programs to micro-entrepreneurs in Africa. 

Money invested in a Goodvestment on Project GAIN goes directly to the micro-entrepreneur of your choice, instead of going through microfinance companies that might charge high interests. Micro-entrepreneurs pay a small fee to enable Project GAIN to pay for transactions and run the website. The fee is a ‘no-harms fee’ since Project GAIN ensures that profits the entrepreneurs make in the programs exceed the small fee by far. Project GAIN helps entrepreneurs in Sub-Saharan Africa.


Before applying for a business loan, it is essential to know how much you need and how you will repay the loan. Having a viable business plan will convince the lender that the loan will be put to good use.


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