Online and Mobile Loans in East Africa

Similar to other regions within Africa, the East Africa community has experienced a revolution of mobile money. In fact, the existing mobile money accounts in the area have surpassed those of conventional banks. This upsurge is due to the increased usage of mobile phones, enhanced networked coverage even in areas where banks are unavailable, and the convenience of obtaining various financial services at your fingertips.

One of the popular services is online and mobile loans. East Africans can get loans in minutes without having to worry about collateral or paperwork. With East Africa comprising third world countries, these digital lenders are viewed by many as saviors in times of need. They offer the additional cash needed by individuals who live from paycheck to paycheck.

M-Shwari

This is a mobile loan that emerged through a collaboration between Safaricom and the Commercial Bank of Africa (CBA). In addition to its deposit structure, M-Shwari offers loans of between 100 and 20,000 shillings to M-Pesa users. The loan limit depends on one’s credit scoring and attracts 7.5% interest. Indeed, it is one of the popular online lending apps in the country. About 30% of Kenyans who own a mobile phone have borrowed money from this site.

How to apply for a M-Shwari loan

• Go to the M-Pesa menu on your phone and select Loans and Savings
• Select M-Shwari and then the Loans option
• Request the loan and enter the desired amount before inputting your M-Pesa PIN
• The cash will be deposited automatically into your M-Pesa account

Tala

Tala mobile loan, which was previously referred to as Mkopo Rahisi, was introduced into the Kenyan market in 2014. It is based in Santa Monica and has a valuation of about $700 million. Its loans range from Ksh 500 to Ksh 50,000. To date, it has offered more than $1 billion to its over 4 million clients located in Kenya and other emerging markets such as Tanzania, the Philippines, India, and Mexico. Its 500 employees is another growth measure that substantiates the inclusion of this app on the list of the top digital mobile loan lenders in East Africa.

How to apply for a Tala loan

• Download the Tala app from the Google Play Store
• Register an account. To do so, you’ll need an M-Pesa account as well as a passport number or national ID
• Go to ‘Apply Now’ and answer the presented questions
• Choose a repayment period that is suitable for you
• Click on ‘Send My Loan’. The money is sent to your M-Pesa account instantly

Saida

In addition to loan apps such as Branch and Tala which operate in more than one country in East Africa, Saida is one of the well-established digital lenders in Tanzania. It holds over 7% of the market. Unlike most of the available products in the market, one has to have saved a substantial amount of money to be eligible for the loan.

Once the online loan is approved, one receives the money within an hour to their M-Pesa account along with the repayment terms. Similarly, they are kind enough to offer an explanation should your loan application be denied. One of its key disadvantages is that a loan’s interest rate varies from one person to another depending on your credit score. The interest rates ranges between 7.5% and 10%. Your loan limit will start at a lower amount and improve as you pay back on time. Your initial limit depends on usage of SMS/calls/internet, usage of M-Pesa and your social connections. Depending of availed amount, you have 30 to 60 days to repay the loan.

How to Apply for a Saida Loan

• Download the Saida app from Google Playstore
• Enter your phone number as a way of requesting for an invitation. This process may take between 3 and 7 days to be completed
• Create a Saida account and answer the presented questions.
• Saida will check your phone usage with reference to mobile money services, data, texts, and calls. Depending on this data, you will be notified on the amount of cash that you can get
• The approved loan amount is instantly sent to your mobile money account. You are also sent detailed terms of repayment

MoKash

MoKash is a mobile product that allows MTN mobile money subscribers in Uganda to save and acquire loans. Since the introduction of the credit product in 2016, its clients have been increasing steadily. Each approved loan attracts a one-off fee of 9%. For one to qualify for a loan on this platform, your MTN mobile money account has to have been active for at least 6 months. Additionally, you should be an active user of MoKash including saving a substantial amount in the account.

How to Apply for a MoKash Loan

• Dial 1655# to activate MoKash
• Go to ‘Savings and Loans’ and select ‘Loans’
• Go to ‘Request a Loan’
• Enter the amount of money you wish to borrow
• Enter your mobile money PIN
• You will get a confirmation text showing that the amount has been sent to your mobile money account

BK Quick

This is a savings and loans product introduced by the Bank of Kigali in Rwanda. It was introduced with the intent of providing its clientele with a convenient platform to access some of the bank’s services. One can access up to RWF 1 million and repay it for up to 6 months. Each mobile loan attracts an interest fee of 4%. The loaned money is usually sent to the client’s BK account. There are no fees charged for transfer of funds between one’s BK Quick and BK accounts.

How to Apply for a BK Quick Loan

• Register your mobile number on BK MobiServe
• Dial *334*
• Go to ’10-BK Quick’
• Follow the prompts and accept the presented Terms and Conditions
• The cash will be sent instantly to your BK account

Conclusion

The ongoing campaign for financial inclusion in East Africa, coupled with the increased access to mobile phones and network coverage, has created a stable foundation for the growth of convenient mobile money services. Online and mobile loans are one of the fiscal trends in the region. There are various entities that provide customers with instant cash at relatively low interest rate.