As the Kenyan economy continues to grow, many people are becoming more interested in peer-to-peer lending. This is understandable as banks often charge high-interest rates for loans and mortgages. Therefore, it can be hard for entrepreneurs and small businesses to get access to capital. In this article, we shall discuss peer-to-peer lending in Kenya. Because this is an excellent option if you are looking for a loan, get a review of the best peer-to-peer lending platforms in Kenya.
Here are the top 7 best peer-to-peer lending platforms in Kenya based on customer reviews and satisfaction:
- Hela Pesa (Hela P2P)
What is Peer-to-Peer Lending in Kenya?
Peer-to-peer (p2p) lending is a setting that allows people to lend money directly to other individuals. This lending approach was common before the advent of technology and banks. Now, there are websites that allow borrowers and lenders to connect directly. In modern Kenya, peer-to-peer lending is ow done online through different loans apps and websites.
To understand peer-to-peer in the Kenyan context, think of a situation when you were broke and had to take a loan from ‘your friend. That’s what peer-to-peer is and it was common in Chamas. It’s a good approach in Kenya especially after the criticism around banks for being too strict on credit approvals.
1. Hela Pesa (Hela P2P)
Hela Pesa is a peer-to-peer lending app in Kenya structured to address immediate financial challenges to clients. It is easy to access these services from your phone after downloading the Hela Pesa app from the play store.
If you want to access Hela Pesa loans, you must be an employee of one of the organizations that signed an MOU with the company for a salary advance. You can find out if your organization is among these from the app.
Contact: +254 207 766 666
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Loans254 is a Kenyan-based P2P lending platform. The platform is on a mission to accelerate financial inclusivity in Africa. They aim to achieve this through innovative digital finance technologies.
The good thing with Loans254 is that there are no third parties. Therefore, the money is transferred directly from the lender to you. As a result, the process of requesting a loan from this peer-to-peer platform in Kenya is quick and easy.
Contact: 0722 116363
This is one of the peer-to-peer lending platforms in Kenya that allows access to small capital. At Zidisha, you are able to access credit at considerable interest based on the period you want the loan. Moreover, this is a competitive lending platform because it does not incorporate middlemen. You deal directly with the lenders, therefore, if you want some quick loan for your business, Zidisha is an excellent lender.
4. Kiva Loan App
Kiva is an excellent peer-to-peer lending platform in Kenya. People love this platform because it gives loans at 0% interest. Therefore, this is a good platform if you want a loan for emergency purposes. Because it provides interest-free loans, Kiva makes loans affordable to Kenyans.
Kiva works by allowing lenders to lend as little as $25 to those in need. In this way, the organization aims to make a real personal impact on the lives of people. Therefore, if you cannot access bank loans for various reasons, KIva is a good option for you. You can borrow as much as Ksh. 500,000 at 0% interest.
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Through the UbaPesa peer-to-peer lending platform, both lenders and borrowers can access services in real-time. As a Kenyan app, you can sign up either as a lender or a borrower. As a lender, you will give out your money to borrowers, and in return, get interest on top of what you gave out.
For you to use the Uba Pesa app services, you must own an Android smartphone and be 18 years and above. Furthermore, you must be a registered Safaricom customer. To ascertain your eligibility, you will be requested to give permission for the app to access your phone data.
Before taking a loan, you should know that Uba Pesa charges a 10% late repayment penalty 48 hours from the due date. Moreover, there is a further 10% on compounded balance on the 10th day from the due date.
Pesa Zetu is another peer-to-peer lending platform in Kenya. The platform aims to give borrowers access to small business and emergency loans. If you are a student and want to further your studies, you can get educational loans from Pesa Zetu. To access the Pesa Zetu app either as a lender or a borrower, you must be an M-Pesa user. This is because the app uses M-Pesa for disbursement and loan collections.
The advantage you get by borrowing from the Pesa Zetu platform is real-time access to credit. Compared to the bank where you have to go through multiple channels to access credit, this app will send the cash direct to your M-Pesa account.
This is a digital financial ecosystem that connects MSMEs to Capital. Compared to the other peer-to-peer lending platforms listed above, Pezesha is easy to use. This is the only platform where those without smartphones or internet access are eligible.
To access these loans without the internet, just compose a short message with the word “apply” and send it to 22235. As a borrower, you will be thoroughly vetted before being given the loan. Moreover, your credit score determines the amount of money you can be awarded. Thus, the higher your credit score, the higher the loan amount you can qualify for.
Benefits of Peer-to-Peer Lending in Kenya
There are several benefits to using peer-to-peer lending platforms. Here is what you stand to gain:
- It is cheaper than formal banking services in Kenya
- You can access loans faster compared to banks
- You can negotiate the interest rate with lenders. Peer-to-peer lenders don’t have a regulated lending system so they allow borrowers and lenders to discuss and agree on the interest rate.
- With peer-to-peer, all transactions take place online. This makes it very convenient for both parties; borrowers and lenders.
Risks of Peer-to-Peer Lending in Kenya
As with any financial transaction, there is a risk. However, the risks involved in p2p lending are very little compared to other alternatives such as credit unions and banks.
The main drawback of peer-to-peer loaning platforms is that they can push borrowers into over-indebtedness. Such an issue has been blamed severely in Kenya as one of the leading causes of depression.
Another drawback is the fact that terms of agreement are not regulated by any agency or authority. As a result, you may end up getting an unfair deal if your lender decides to change the repayment schedule without first consulting you.
To avoid all these risks, make sure to read and understand each term before signing on the dotted line. Check if the repayment method is clear and what happens in case you need to withdraw your money or repay early.
Peer-to-peer lending in Kenya is the next big thing. If you are an individual or a small business looking for capital, then it is worth giving peer-to-peer lending in Kenya a try. There are many benefits associated with this lending approach for both borrowers and lenders. Furthermore, they have a relatively lower risk compared to other options like credit unions and banks.