Have you ever wondered whether there is some peer to peer lending platforms in Kenya? If so, we are here today to discuss the top platforms for Peer to Peer lending in Kenya.
In this article we will look at;
- What is a peer to peer lending in Kenya
- The best platforms for peer to peer lending
- How does Peer to Peer Lending in Kenya Work?
Let’s delve into details below
What is a peer to peer lending in Kenya?
Peer to Peer lending (p2p) is a platform for lenders to access funding outside banking institutions. Before the advent of technology, this used to happen a lot within Chama’s and Merry-go-rounds.
However, with the adoption of technology in Kenya, there has been the establishment of online platforms that connects lenders to borrowers.
Investors in Peer to Peer lending are everyday people who have extra cash in their hands and are willing to lend it to other people and earn some interest in the process.
Now that we understand what Peer to Peer lending in Kenya is, let’s look at the best platforms for this.
Peer to Peer Lending works differently from how the banks work. Borrowers are matched directly to the lenders through the lending platform (Zidisha). Lenders mak a profit through the fees charged by the lending platform as well as a percentage of interest.
Why borrow from Peer to Peer Lending Platforms in Kenya?
Here is why you should borrow from a peer to peer lending platform.
- Everything is done online and it’s fast
- You do not have to give security for a loan as most loans are unsecured
- Lower or sometimes no interest charges
- Automatic repayments
- Funds can be used for another reason other than the one borrowed for without any need for approval as long as repayments are made.
Peer to Peer lending in Kenya
There are several platforms in Kenya offering peer to peer lending in Kenya. Each of these platforms charges varying interest rates as well as has different terms and conditions.
Below we will outline the best of these platforms.
Zidisha is a peer to peer lending platform in Kenya that enables people to lend small amounts of money to entrepreneurs. At Zidisha, there are no third parties involved as the money is transferred directly from the lender to the borrower.
What’s more, is that this platform allows the Lenders to communicate directly to the entrepreneurs they have lend money to.
Kiva is another platform that connects lenders to borrowers in Kenya. At Kiva, all the loans are extended to borrowers at a 0% interest charge. As a result, the Kiva platform makes loans affordable to Kenyans who are unable to access loans from commercial banking institutions due to various limitations.
An entrepreneur can access up to KES 500,000 with a 0% interest rate.
3. Uba Pesa App
Uba Pesa is a Peer to Peer lending platform developed by Kenyans for Kenyans. This platform was launched in Kenya in 2018 and it has been in operation since.
It is worth to note that Uba Pesa charges an interest rate on the loans extended to borrowers. The interest rates charged, however, varies based on the repayment period agreed upon while borrowing.
The shorter the repayment period, the lower the interest rate charged and vice versa. The repayment periods are divided into 10 days, 20 days and 30 days respectively.
Unlike Zidisha that allows lenders and borrowers to communicate, Uba Pesa App does not allow this communication to happen.
Moreover, a borrower using the Uba Pesa app is able to access multiple loans unlike the other platforms that only offer one loan at a time.
4. WayHoty App
WayHoty is also an online peer to peer lending platform in Kenya just like Uba Pesa. Moreover, WayHoty offers more than Peer to Peer Lending in that it also offers working capital loans for small businesses as well as mobile loans.
In order to borrow from their Peer to Peer lending platform, one has to meet the following criteria:
- Be over 21 years of age
- Have a source of income
- possess no criminal record
- Be a Kenyan Citizen living in Kenya
Pezesha is perhaps more revolutionized than all the other platforms listed above. As through Pezesha, one can borrow even without access to the internet.
One only has to send the word Apply through shortcode 22235 in order to be able to access the loan.
However, for a borrower to be able to access their loans this way, they have to already have been vetted. Also, they need to have taken at least one loan with Pezesha and paid it.
All loans offered are based on your credit score rating. Therefore, the higher your credit scores, the bigger your chances of accessing the loan.
Conclusion on Peer to Peer Lending in Kenya
Now that we have looked at the best peer to peer lending platforms in Kenya, it is important to read through the terms and conditions of each platform.
This way, you will only secure a loan that you can easily pay back without straining much. There are some platforms like Zidisha that require weekly repayments while there are others that require monthly repayments. Dependent on the type of business you operate, and with all this information you can be able to choose the best platform to lend or borrow from.
Are there some other peer to peer lending platforms we have left out?