The High Costs of loans in Kenya


Kenyan Business people are quite a resilient bunch. From the bad infrastructure, untrustworthy and UN motivated workforce, bad government policies, high inflation and still we have to deal with the enormous costs of Capital i.e. Loans

Having a loan in Kenya is a tricky situation to maneuver due to how expensive it is to get and pay one.

 Case study

A 2-year Ksh 350k secured loan to be paid in 13% interest 

Collateral a 2012 Honda fit valued @ 500k

Monthly installments 16,640

Total payments 399,360

Interest on loan 49360

Car valuation form 5000

Car double transfer fees 6000

Car track 12000

Legal fees 350

Loan processing 2.5% of loan 8750

Insurance fees 5% of the loan 17500

The total cost of the loan inclusive of the interest paid is 98960. That is roughly 100k plus on the loan.

This is roughly 30% of the loan but it will gradually decrease as the loan amount increases as some costs are constant...

Before going on this journey be careful and very calculative when buying a loan from a bank.

Reference... Family bank loan calculator