Hela Pesa Salary Loan

Category: Personal finance

How to Apply for a Loan in Kenya
Applying for a personal loan in Kenya can be a useful way to borrow money for a specific purpose, such as consolidating debt, paying for a major purchase, or financing a home improvement project. Here is a comprehensive guide on how to apply for a personal loan and the documents you will need to provide in Kenya.

What does it mean to apply for a personal loan?

Applying for a personal loan in Kenya means that you are requesting a loan from a lender, such as a bank or microfinance institution, to borrow a specific amount of money for a specific purpose. Personal loans are usually unsecured, which means they do not require collateral, such as a car or property, to be put up as security for the loan. Instead, lenders will consider your creditworthiness and ability to repay the loan when deciding whether to approve your application.

To apply for a personal loan in Kenya, you will need to provide the lender with some personal and financial information, such as proof of identity, proof of income, bank statements, and credit and debt information. You will also need to fill out an application and wait for the approval. If your loan is approved, you will need to review and sign a loan agreement that outlines the terms of the loan, including the interest rate, repayment schedule, and any fees. Once you have received the loan funds, you will need to make regular payments according to the agreed-upon repayment schedule.

Once you have received the loan funds, you will need to make regular payments according to the agreed-upon repayment schedule. The interest rate on personal loans in Kenya can vary and may be fixed or variable. It is important to carefully consider the terms and conditions of the loan, including the interest rate and fees, before making a decision.

Overall, personal loans in Kenya allow individuals to borrow money from a lender for a specific purpose and require the borrower to provide some personal and financial information, fill out an application, and agree to the terms of the loan. The borrower is then required to make regular payments according to the agreed-upon repayment schedule.

Benefits of personal loans

Personal loans can be beneficial in a number of ways. Some of the advantages of personal loans include:
- Flexibility: Personal loans can be used for a variety of purposes, such as consolidating debt, paying for a major purchase, or financing a home improvement project.
- Convenience: Personal loans are usually easy to apply for and can be approved quickly, making them a convenient option for borrowing money.
- Affordability: Personal loans may have lower interest rates and fees than other types of loans, such as credit card loans or payday loans, making them more affordable for borrowers.
- Credit building: Repaying a personal loan on time can help to improve your credit score, making it easier to borrow money in the future.
- Fixed payments: Personal loans usually have fixed repayment schedules, which can make it easier for borrowers to budget and plan their finances.
Overall, personal loans can be a useful and convenient way to borrow money for a specific purpose and can offer a number of benefits, such as flexibility, affordability, and the ability to improve your credit score.

Steps involved in taking a personal loan in Kenya

Determine your borrowing needs and shop around for lenders: Before you start the application process, it is important to determine how much money you need to borrow and what your repayment terms will be. You can compare offers from different lenders, such as banks, microfinance institutions, or online lenders, to find the one that best meets your needs. Some lenders may have specific requirements, such as a minimum credit score or income level, so be sure to check these before applying. It is also advisable to consider the interest rate, fees, and other terms and conditions of the loan before making a decision.

1. Documentation validation

To apply for a personal loan in Kenya, you will need to provide the lender with some personal and financial information. This may include:

Proof of identity: This could be a government-issued ID, such as a national ID card or passport.

Proof of income: Lenders will want to see evidence of your income, such as pay slips, tax returns, or bank statements showing your salary deposits. If you are self-employed, you may need to provide additional documentation, such as financial statements or a letter from your accountant.

2. Bank statement

Bank statements: Lenders will want to see your recent bank statements to get a sense of your financial stability and ability to repay the loan. These should show your income, expenses, and any outstanding debts you may have.

3. Debt and credit card information

Debt and credit information: Lenders will want to see your credit score and any outstanding debts you may have, so be prepared to provide this information. You can obtain a copy of your credit report from the Credit Reference Bureau (CRB) in Kenya.

4. Loan repayment

Repay the loan: Once you have received the loan funds, you will need to make regular payments according to the agreed-upon repayment schedule. It is important to make these payments on time to avoid late fees and damage to your credit score.

In summary, applying for a personal loan in Kenya requires you to gather some personal and financial information, fill out an application, and wait for the approval. If your loan is approved, you will need to review and sign the loan agreement and make regular payments according to the repayment schedule. By following these steps, you can successfully apply for a personal loan to meet your borrowing needs in Kenya. It is also important to carefully consider your borrowing needs

5. Application filling

Fill out the application: Most personal loan applications can be completed online or in person at a lender’s office. Be prepared to provide the lender with your personal and financial information, as well as any details about the purpose of the loan. You may also need to provide references or a guarantor, depending on the lender’s requirements.

6. Approval

Wait for approval: Once you have submitted your application, the lender will review it and make a decision on whether to approve the loan. This process can take a few days to a week, depending on the lender. During this time, the lender may request additional information or documentation to support your application.

7. Terms and agreement review

Review the loan terms and sign the agreement: If your loan is approved, the lender will provide you with a loan agreement that outlines the terms of the loan, including the interest rate, repayment schedule, and any fees. Be sure to review this carefully before signing. It is important to understand all the terms and conditions of the loan, including any penalties for late payments or default.

8. Loan repayment

Repay the loan: Once you have received the loan funds, you will need to make regular payments according to the agreed-upon repayment schedule. It is important to make these payments on time to avoid late fees and damage to your credit score.

In summary, applying for a personal loan in Kenya requires you to gather some personal and financial information, fill out an application, and wait for the approval. If your loan is approved, you will need to review and sign the loan agreement and make regular payments according to the repayment schedule. By following these steps, you can successfully apply for a personal loan to meet your borrowing needs in Kenya. It is also important to carefully consider your borrowing needs
05/12/2022
The 80/20 rule you can use to simplify your budgeting process
It might seem simple but sometimes budgeting can be an overwhelming experience. What do you prioritize? What comes first in your budget list? How much time should you spend planning out your budget?

The fact that you have to track every expense in your life to come up with an accurate budget can be a daunting task, to begin with. The 80/20 budgeting offers a better solution to this issue. It makes tracking your day-to-day spending easier and makes coming up with a budget a far much better experience.

Most Kenyans live paycheck to paycheck without any form of planning concerning their income and expenses. This is a dangerous way to approach your personal finance. The 80/20 rule will help you get your finances back on track and gain control of your spending.

What is the 80/20 rule?

The 80/20 rule is known as the Pareto principle and it is used in the Pareto analysis of businesses. Pareto was an economist who use an illustration to show how the principle works. He noticed that when harvesting his peas, 20% of the pea pods were responsible for 80% of the harvest.

He further proved his observations in Italian macroeconomics. In 1906 he observed that 80% of the Italian wealth was owned by 20% of the population.

How 80/20 rule work in personal finance

The basis of the principle is simply that 80% of results come from 20% of input. This assumption has two meanings pertaining to budgeting and savings in one’s life. In your budget, the 20% is what you pay yourself as savings and the 80% will go to making your living comfortable.

Let’s look at an example. Let’s imagine I am an entity like a limited company. As an entity, I have Expenses and Revenue. If my expenses are more than my revenue then I am not a profitable entity and I might be looking at bankruptcy soon.

This applies to personal finance too. If your personal expenses are higher than your income, it means you are broke, regardless of how many assets you have.

Back at the company, if we want to bring it back to profitability we have two options, increase our revenue or cut back on our expenses. Further profitability will be achieved if we can increase our revenue and cut back on expenses.

Ironically, the 80/20 rule will be applied to identify the most crucial parts of the business that should be accelerated and the least useful expenses that should be cut.

In your personal budget, 20% will be your personal profit from your earnings. The 80% will be used to take care of your expenses. Like a good business, you must be vigilant to ensure you are increasing your profits, either through increased earnings or ruthlessly cutting down on unnecessary expenses.

The Pareto principle can be observed in savings too. The 20% saved will be more crucial to your life goals than the 80% you will spend on the day-to-day running of your life.

Note that, this does not make the 80% less important. This is a fallacy. What it means is simply that you chose to prioritize the 20%.

80/20 Rule Budget

The 80/20 budget is a percentage breakdown budget method where we break our budget down into percentages. It dictates that you first save 20% and spend 80% on your expenses.

The 80/20 rule emanates from the 50/30/20 rule which is used to cut the expenses into 50% needs and 30% wants. The 80/20 rule combines wants and needs into one category, expenses.

The budget percentile for the 80/20 rule should look like this:
- 80%-personal expenses
- 20%-savings.
Advantages of using the 80/20 rule

The 80/20 is an easy budgeting tool and can help you get your budget in order quickly. It has several advantages which make it a suitable tool for those on the go.
- It is very simple. The 80/20 rule is very simple to follow. It gives you a fixed number to work with regardless of your income. It does not stipulate fixed spending which many might not be good at following.
- Easy to turn into a habit. It is very easy to internalize the 80/20 rule into the day-to-day running of your finances. You can make a budgeting habit without any need for apps or special tools. It requires the discipline of sticking to the stipulated rule.
- Automate your savings. You already know how much to expect each month, it’s a matter of arranging with your bank for 20 percent of it to go to your saving account. This will save you the temptation of spending the money while it is still accessible.
- Time efficient. In the modern world, things move fast and so should your budgeting needs. You can set your 80/20 budget in a matter of minutes since it has just two inputs to take care of.
- Excellent reliability. By giving you the 80%, you get to decide how to spend most of it but always ensure that you have saved first. This leeway gives you maneuvering when it comes to your expenses. You don’t need fixed spending as long as it is below the stipulated 80% each month.
- It can be nested. In computer programing, the ability to nest a function inside another one makes programs much more efficient. The 80/20 rule can also be nested. You can move from just saving to also applying it to the expense itself to identify the 20% of expenses that take up 80% of your budgeted spending.
Conclusion

The 80/20 rule started in macroeconomics in the 20th century. Over time it has proven itself and filtered into every industry and finally personal finance.

The 80/20 rule can be applied in budgeting to encourage more savings. It saves time by having a few variables that need to be addressed each month. It can be automated for those with fixed monthly salaries.

Finally, can you tell us what kind of budgeting rule you use? How is it working for you? Do you think the 80/20 rule can improve your budgeting and saving needs?
30/11/2022
Five Things To Keep In Mind About Personal Finance
Personal Finance

Managing personal finance is a long-term commitment that can confuse even the most seasoned financial veteran. The issue is over time even a well-thought-out plan can run out of steam due to circumstances out of our hands.

Personal finance covers both short-term and long-term goals pertaining to your financial goals. Personal finance skills are essential regardless of your age or income. If you need to learn how to manage your finances you have come to the right place

Personal Finance

Personal finance is a broad term that covers money management, savings, and investment. Personal finance can be summed up as the knowledge of how to plan your financials by understanding personal cash flow and coming up with a solid plan to manage it to meet your financial goals.

Why is it important to manage your personal financials

To avoid being in a constant financial crisis mode. When you don’t have your financials in order, any small emergency will turn into a crisis.

During the coronavirus pandemic, the entire economy shut down for months forcing governments to intervene, if they could afford it. The majority lost their jobs and without a social safety net in Kenya, you were expected to float on your own. It was a painful experience that left the majority of the populace at the mercy of government handouts that rarely came.

Those who had savings faired well, especially those who were willing to cut back on expenses and focus on important needs.

This is why personal finance is important. Having a good grasp of money and how to manage it can lead to a better quality of life.

Personal finance is a broad field and covers a lot of topics. We are going to look at five of the most important that you should keep in mind.

Debt

Debt is often underestimated when people evaluate how important it is going to be in their financial plans. Debt plays a crucial role in huge purchases we undertake in life. Debt is used to finance land purchases, house construction, vehicle purchase, and education.

So the question is how do you manage your debt? How much debt can your income finance?

Debt has a cost just like any other good you purchase. This is the interest you pay on the loan. When budgeting for a debt, you should understand its cost in form of interest and how long you will pay for it. The outcome of these calculations will give you the true cost of the debt.

How you use your debt will define its place in your personal finance statement.

Most large loans will have a predefined use; like a mortgage which can be used to finance a house purchase, or a car loan for a vehicle. Why you make this purchase is important since they may help in repaying the loan or force you to bankruptcy. A good loan leaves you with an asset after you have finished your payments.

Credit is not a loan. Credit doesn’t have any predefined use. They are short-term 1 to 12 months compared to loans which have 5 to 10 years repayment plans.

Income

Income is the source of revenue for your personal finance. You can have more than one source of income. The amount of income you bring in will be the source of all your personal spending and savings. Your gross income will take care of your taxes and deductions. After deduction, you are left with net income to budget for your needs and wants. We recommend the 80/20 rule to help you in your budgeting.

Income can have different sources. This include:
- Wages
- Dividend
- Rental income
- Salary
It is important to note that your income will determine your liquidity. Most of your savings can’t be accessed all the time otherwise they stop being savings accounts. Your income budget should take care of emergencies.

Saving

Savings are what you keep after you have taken care of your personal expenses. Saving is armed to cover large expenses and emergencies. Savings offer opportunity cost since it’s idle money. Liquidity can be traded through borrowing. It has good returns through interest if you are willing to loan your savings through an intermediary like a bank.

Banks offer access to money markets by functioning as an intermediary between the saver and the borrower.

Various institutions offer consumer savings in Kenya. This includes:
- Saving Banks
- Deposit-taking Saccos
- Mutual Saving banks
- Credit co-operatives
Do your research on institutions near you and see which has the best returns on their savings account.

Note that savings should not be treated as investments. Savings are for covering emergencies in the long term while investments are for long-term increases in personal wealth.

Investing

Investing involves purchasing assets on the premise that they will appreciate in value and increase the value of your investment.

Investing is aimed at increasing the value of an individual’s wealth by speculating on the future growth of the asset. Investing unlike savings carries a risk due to exposure to market volatility and can register a loss on your investment.

Investing can be quite complex and can take a while before one is good at it. Moreover, it is important that you educate yourself on the simple functioning of the markets to get a good idea of how the market behaves.

There are several forms of investment currently in the Kenyan market. Some of them include:
- Bonds
- Stocks
- Commodities and derivatives
- Mutual funds
- Index Funds
- Exchange-traded funds
Investments carry huge risks because they tend to have huge returns for those that make them. It’s important to understand the industry you are investing in to see if it has future growth potential.

Spending

Nobody can survive in the modern world without spending. Most of our income goes to personal expenditures that just can’t be avoided. Spending can get out of control if not well managed.

Spending is the outflow of cash from income. The bulk of income goes to spending including basic needs like housing, food, and clothing.

Spending should fit into your budget. By planning your spending you can finance your purchases without any need of borrowing which comes with an extra cost. Plan to live within your means to minimize unnecessary spending.

Spending decisions are always dictated by income. This means you have to make choices on what you spend and the utility you will get out of the purchase.
25/11/2022
Tactics to Saving Fuel this Festive Season
Oil is the opium of the world. The dose that keeps the world patient while it’s being overloaded with climate change, extremism, poverty, and every other manner of garbage. The world is addicted to it and I doubt if there is any detox program to wean itself off. To put it into perspective, the world consumed close to 99.4 million barrels of oil per day this year. This addiction has made the House of Thani family of Qatar very rich, by the way. The family is worth close to $335 billion. Meaning that if they add nothing to their fortune and consume $1 billion a year, their fortune will run out in the year 2357. Yeah.

Oil and its offsprings get us high, and we’re never coming down. But, being the good humans we are, moderation is our virtue, and although we love largesse, our conscious dictates we save here and there. This is why I bring you this post ladies and gentlemen. We are speeding into the festive season at sixty minutes per hour. The period when we spend and simultaneously strive to save. To reach my quota of goodness this year, I am going to offer some insights to help you save fuel this season. Ready? Let’s Go…

Clean your filter and change your engine oil

This is Saving Fuel 101. Want to save fuel? Service your vehicle.

Saving fuel has never been this easy, but many people never bother. As a distinguished member of the Amateur Mechanics Association of Kenya, I bring you a special message from the automotive gods. Change or clean your filter regularly and you will save a lot of fuel. Don’t believe me? Well, try to keep up.

Everything requires oxygen to burn, including the fuel in your engine. The work of an air filter is to, well, filter the air of dust and other debris from getting into your engine and damaging it. However, if it’s clogged, less air passes through and thus little of it enters the engine. From basic science, we know that air is made up of approximately 21% Oxygen. Less than a quarter. So the less air, the less oxygen available for burning your fuel. Your engine, on the other hand, has a fixed capacity and if less air is drawn into the cylinder per charge, it will gladly fill the remaining percentage with extra fuel. Resulting in a rich mixture. Since there is less air to burn that fuel, the oxygen will bind with whatever fuel it can burn and release the rest of the unburnt fuel as black smoke. Do this a few thousand times per minute and your vehicle turns into a fuelaholic. A guzzler. Consuming your fuel in a manner likely to suggest that it doesn’t like you. Which is terrible, especially if you intend to save on fuel.

Oil, as you know, lubricates your engine. If you don’t change it regularly, it becomes heavy. Which in turn reduces its lubricating capability, making the engine strain to overcome the extra friction, making it work harder than necessary. And you know what happens to an engine when it works hard? No, it doesn’t get paid more, Ernesto. It consumes more fuel. Jeez!!!

Reduce idling and unnecessary revving

Idling is sometimes unavoidable in the modern world. And the more modern the world becomes, the more our vehicles will idle. This is a fact that won’t save you fuel, anyway. We spend more time at junctions, red lights, and traffic jams because the infrastructure grows slower than the rate we buy cars. On average, it’s estimated that we spend close to 3-4 hours every day on the commute. Keeping your car idling for even a third of that time will cost you about 0.64 liters of fuel. This is because, as the engine idles, it’s consuming fuel, doing no work. Wasteful. If you’ve to spend more time idling in traffic jams, the best strategy is to turn off your engine. This will help you save fuel because your engine will only run to drive your vehicle. Now that’s smart.

Note: Don’t do this if your engine has a hard start. It will embarrass you.

Revving you’re your engine is the most wasteful thing you can do. Some motorists rev their engines after starting. Why? It’s pointless and adds nothing except waste fuel by unnecessarily straining the engine. The basic procedure is to start, idle, and drive. Unless your engine has a hard start, don’t rev it, especially if you’re trying to save fuel. However, if you’re not trying to save fuel, rev baby rev.

Avoid thrashing your engine

If you have a heavy foot, go see a doctor. It might be a condition. But if seeing a doctor is not on your bucket list, then hear me out. Putting the pedal to the metal, the symptom of a heavy foot, will not:
1. Make you go any faster
2. Make you look any cooler
3. Save you any fuel
Unless you have an electric car, which I know you don’t desist from smashing the pedal to the floor. This is because your car weighs at least a ton, and therefore will need to overcome its inertia before picking up any discernible speed. Suddenly stomping on your accelerator, as you move, opens the throttle body wide allowing maximum fuel into the engine with little work. All this just wastes your fuel.

This also goes for your driving. Unless you’re a getaway driver in a robbery, it makes little sense to make your engine scream. Learn to operate your engine at optimum rpm to suit your driving. This will not only help save you unnecessary visits to the mechanic, but it will also go a long way in helping you save on fuel.

Walk

No brainer. The best way to save fuel is to not use your car.

Get a Prius

This is my favorite. If you have some 3 Million shillings lying about that you have no use for, get yourself a Toyota Prius. This move will save you some crazy amounts of fuel. According to Toyota, the Prius returns about 56 mpg combined. For every 100 km traveled, a Toyota Prius will use an average of 4.2 liters of petrol. A Premio returns 8.3 liters per 100 km. If you were to travel from Mombasa to Kisumu, a distance of about 825.5 km, assuming every other thing is held constant except fuel, the journey will cost you about 6,000 shillings in a Prius. Yeah, I know, that’s 4000 more than an Ena Coach ticket. That’s, however, about 6,000 shillings less than what a Premio will consume in fuel. What’s more, you will finish the journey earlier as the Prius has 136 hp compared to a Premio’s modest 125 hp. Talk about being outclassed.

Please Note;

This is not an exhaustive list. It’s but a tip of a very long list. However, if you are to learn anything from the list, it’s that it doesn’t need to take drastic measures to save fuel (well, except the last one). Doing the above will save you a lot of money in the future. And as you speed along into the festive season, I wish you nothing but the best and happy fuel saving.

Sorry, it’s me again. I couldn’t leave you without a call to action so, here goes nothing. Hela Pesa Salary Advance supports this post. Please head over to our website or download the Hela Pesa App for a quick Salary Advance this festive season.
23/11/2022
3 simple steps to manage and save your hard-earned salary

Let’s admit it. We’ve all been there. Every year, full of promise and steam, jazzed up on Rich Dad, Poor Dad, and Other Stories, we craft lofty New Year’s resolutions. We solemnly swear to keep promises that fizzle out and die way before the New Year starts to sit. In Resolution Land, we give prime real estate to savings and losing weight. We usually realize we haven’t saved and that we can’t fit into clothes only when the year ends. We feel bad for a couple of weeks, then, being the valiant warriors we are, we get up, dust ourselves, and…make new resolutions. And the cycle begins. But it need not be like that. Like everything in our lives, spending, saving, and losing weight are all governed by emotion, which, if you look closely, is just a bunch of habits. As William James once said, “All our lives are but a mass of habits”. It means that we can rid our toxic behaviour with enough effort. Habits can be changed, but it won’t happen in one fell swoop. Instead, we have to do our bit every day. Therefore, to save, we have to change our habits around money, specifically being conscious about how we spend money. To do our bit and change how we spend so we could save, we could:

Establish a strict budget

You need to understand that having a budget is necessary. You must establish the bounds within which your money spans and stick to it. This, however, is easier said than done. Having a budget is, to say the least, hard. Very hard. We are so used to impulse buying that even after we firmly establish a budget, we still overspend. Shopping becomes fun, whizzing around the aisles picking things willy-nilly and dropping them in our carts like they’re hot, budget be damned. News Flash folks, shopping should never be fun. If you are putting on makeup to go shopping, you’re in the wrong career. Consider changing it. This is particularly worse when we bring kids along, put them on the latest cart, and try to set a new speed record. This is not only bad for your self-esteem but also increasingly damaging to your wallet. Unless your adorable ‘Dadie’, is part of your shopping, it might be a good idea to leave them at home. And no, you won’t be a bad parent. Unless you’re leaving him home alone, in which case, yes, you are a bad parent.

To not be over the budget, we need to have lists. Listing every purchase down, whilst it might be constrictive at first, is a great way to stick to your budget. It’s been psychologically proven that people who make lists stick to their plans and save money more than non-list people. Further, you could describe each item and why you need it, i.e., why it must be on your list. Justifying your purchases is a great way to stick to your list. This way, you only buy what you need, not what you want.

Also, try to only use cash for your purchases. This way, you only use the money you set aside to buy whatever you need. To know how much you will require, try looking up prices online to get a good estimate of how much cash you need to carry, then increase it by about 20 per cent, in case prices get adjusted for inflation before you reach the supermarket.

Put your finances in order

You need to determine your financial priorities and set preferences, with decreasing importance. Once you do this, stick to it. Just like writing your list for your purchases, make a list of the important loans that you need to pay off first. Make a list of everything, including a list of what you should write in a list. Having a list saves you headaches and helps you pay off unnecessary debts and loans. Clearing that gives you a ballpark of how much money remains to budget with. This, of course, proceeds with the assumption that you still have money left. But if your debts are more than you earn, pay them first, then find a quiet place to scream your head off. Seriously. Just relieve the pressure. Here’s why.

Debt is detrimental to your health. According to debt.org, the effects of debt include but are not limited to, low self-esteem, anxiety, and stress. It would help if you settled your debts, especially short-term debts that accrue considerable interest. Before you embark on saving money, you must save yourself. There’s nothing more valuable than your life. Period. Once you pay toxic debts, and find yourself not able to finance your needs, head over to the Hela Pesa website or download the app to access a salary advance.

I know, I am contradicting myself here, but before you stone me, hear me out. One reason Hela Pesa’s salary advance will save your mental health is that unlike other loans with specific and strict repayment periods, Hela Pesa gives you the freedom to choose the duration you want to repay your loan from two months to two whole years. If you chose, let’s say, a year, then you have twelve solid months to structure your repayment worry-free. This way, you can pay off a little and still have money for your budget. What’s more, since deductions happen through a checking account, you won’t have to bite your tongue trying to do the math, leaving you plenty of time to focus on the important. So yeah, not so bad after all, ain’t it?

Regulate your spending

Yes. No question about it. Sinning is the biggest enemy of saving money. While I understand your need to sin, under the guise of winding off after a long day, etc., you need to moderate it. Excessive consumption of alcohol is not only harmful to your health but also gives you pocket leakage. And the sicker your pocket, the broker you are. This calls for strict rationing of the money you spend on your poisons or the amount of booze and cigarettes you consume. While it’s excessively hard to accomplish the former, the latter might work but it requires brutal honesty from you.

One typical way to do this is to analyse carefully the amount of money you use, say, on a given weekend and on what. After this, strive to carry to the club, or wherever you go to poison yourself, only the necessary amount leaving the rest at home. This, of course, means leaving behind your cards and preferably your pin or clearing money in your mobile account.

So there you have it, folks, saving money need not be as complex as sometimes it’s made. Cutting a little here and there will go a long way in reducing your overhead. You need not wait for the New Year’s Resolutions to save.

18/11/2022
Hela Pesa Survival Guide: How to Survive the Coming Recession
I have good news. And bad news. Then some more good news. The good news is that it won’t last a long time. Typically 2-10 months maximum. The bad news is that it is coming, but we’re not too sure about that because there’s divided opinion.

Most experts believe it will land in the Year of our Lord 2023, others think we may narrowly miss it. Well, as the Americans say, the jury is out on that one. The last bit of good news is you can weather it. It is an artificial construct of humanity arising out of the need to control everything. A product of economic tectonics and therefore survivable, especially if you follow what I’m about to tell you

If you didn’t read the title and wondered what I’m harping about, I’m talking about a recession. Although there is no agreed definition of a recession, Wikipedia defines it as a significant decline in economic activity spread across the market, lasting more than a few months, normally visible in real GDP, real income, unemployment, industrial production, and wholesale retail sales. Wait.

Before your eyes glaze over and your brain completely freezes, what I mean in simple terms is that tough times are looming and there will be very little money to go around. Your indulgences might not be fully satisfied.

One of the precursors of a recession is, among others, two or more consecutive negative GDP growth values. The good ol’ U.S of A has registered two back-to-back negative GDP growth values, which to me, means its economy might be shrinking. And we know that, in this modern, digital, and interconnected world, when America sneezes…well, it might be a good time to queue for a PCR test.

The outlook might be bleak but Hela Pesa Salary Advance has your back. I know, we are a loan company and we might have absolutely no business telling you how to survive a possible job loss. But before you throw the first stone, here is the writing on the ground. We are a customer-centric company and that means that above, all our relationship with you is of utmost importance to us. Your well-being comes first and profits a distant second.

So… To survive a recession, you should:
- Diversify your income
- Learn a new skill
- Stay cool and don’t panic
1. Diversify your income

Depending on a single source of income to cover everything you dream of is akin to being a one-legged man in a butt-kicking contest. Yes, you might be busy believing even that you’re working hard but all you are doing is wearing yourself down.

This is the 21st century and hard work has been replaced by S.M.A.R.T work. Work hard and you will never rest a day in your life. Work S.M.A.R.T and you will never tire. One way of diversifying your income is to have a side hustle, if you already don’t have one, that is. A side hustle loosens some of the tightness your money might be feeling in a recession.

Remember when I said Hela Pesa Salary Advance is customer-centric? We are giving you a Salary Advance so you can have the much-needed capital to start your side hustle. That’s how customer-centric we are. When everyone runs away from you, even firing you; we run to you, with open arms. Our Salary Advance Loan, unlike other conventional loans, allows you to set your repayment period for up to 24 months.

Being the savvy side hustler you are, this gives you ample time to repay your loan and make a tidy profit. Click to apply on our website (link), or on our app for the Salary Advance Loan to start your survival run.

2. Learn a new skill

A side hustle, most likely powered by our Salary Advance Loan is a new skill. But, a side hustle is not the only new skill and frankly, if your natural habitat is the corporate world, then a new skill is a no-brainer. Learning a new skill will never grow old, or tired and will never go wrong. It is like…nothing I know about. If we’ll slip into a recession, you must get cranking and learn a new skill that will add to your already impressive resume.

Learning a new skill improves your prospects for more money by increasing your income streams. Which is the whole point of wanting to survive a recession. To have more money. However, that won’t be the only benefit. Learning a new skill improves your personal development, especially if you use the 80/20 rule, as indeed.com calls it.

A new skill, further upskills you, especially if it’s in line with what you do for a living. This way, if the other guys get laid off, you are retained because you have something that makes you unique. That’s the whole point of survival.

3. Stay cool and don’t panic

Average investors know two words around which they build their whole vocabulary: buy and sell. If you have invested in some stocks then you might want to learn a new word, hold. Panic buying, especially in times of a recession has killed more companies than you could count with all your digits.

Average investors liquidate their stocks reinforced by the fears that the stocks they have invested in will lose value. Some of it might be true but most of it is not. You are a smart investor and something that separates the chaff from the grains is staying cool in the face of tribulation. Most businesses fold in times of a recession, but from an investor’s point of view, take your time and do not, and I mean, DO NOT go with the flow. If you want to survive, sometimes you have to go against the crowd however wise it is.

This is a series of finance guides from Hela Pesa and our product, the Hela Pesa Salary Advance Loan. Although I did not put part one in the title, I put my belief that you will read the PS. So keep your eyes peeled for more of the finance guides because we are not customer-focused, we are customer-centric.
16/11/2022
What you need to know about Personal loan borrowing
Personal loans are short-term loans taken by a borrower and are usually repaid on a monthly basis. They are usually unsecured and don’t need collateral for them to be issued.

Personal loans are normally for amounts from about 1,000 up to 100,000 with repayment terms from one to twenty-four months depending on the monthly charges you are willing to pay.

The amount you can borrow and the interest rate you’ll be offered will depend on:
1. Personal circumstances. An emergency loan is likely to have a higher interest than a loan you are willing to wait for a week or two to get.
2. your credit history. Your ability to repay a loan is a big factor in how much a lender is willing to offer you. The interest rate is always higher if your loan repayment history is poor.
When you take out a personal loan, the cash lump sum will be paid into your bank account. You’ll then repay it each month, plus interest, for the duration of the term. The lender and the bank might apply some fees to the final amount.

Personal loans are often advertised with low headline rates that can make them look very cheap — but you could be offered a higher rate if the lender believes you are a risk bet. Make sure you get a quote from the lender before you apply to ensure you get the right interest rate that you are comfortable with.

What to know before you start borrowing

A personal loan is different from a secured loan

With a secured loan, you’ll put something forward as security for the loan. This is usually your property. The lender can ultimately take possession of this asset if you don’t repay the loan.

With a personal loan, you are not required to offer anything as security for the money.

Personal loans also tend to be for shorter terms than unsecured loans, and for lower amounts.

Personal loan cooling-off period

When you take out a personal loan you have a 10-day cooling-off period from either the date the loan agreement is signed or when you receive a copy of the agreement, whichever is later.

If you cancel during the cooling-off period, and you have already received the funds you have up to 30 days to repay the money in full.

However, you’ll be charged interest for the period you had the credit. But any additional fees you paid might be refunded by the lender.

Please note that the cool-off period does not mean you can walk out of the loan. It means within the first month you can decide to repay the loan fully without incurring any other cost outside of interest.

Early repayment penalties on a personal loan

You might be charged early repayment penalties on your personal loan if you:
1. want to pay more off your loan each month than your set monthly payment
2. want to pay off the entire loan before the end of the term
Early repayment penalties normally amount to one or two months’ interest. However, some loan providers don’t charge early repayment penalties at all. If you think you might be able to pay off your loan early, you should borrow from one of these providers.

Some personal loans have fixed rates

Some loans have fixed interest rates. However, some personal loans have variable interest rates, meaning they can go up or down.

If you want to know for sure how much you will need to repay each month you should opt for a loan with a fixed interest rate.

The interest rates on a personal loan may vary depending on how much you want to borrow. This is called a ‘tiered interest rate’ system. Typically, you’ll be charged a higher interest rate for smaller loan amounts.

When you apply for a personal loan, you might not get the representative loan rate advertised by the lender. This is because loans in Kenya are tied to the central bank rates that vary from month to month thus the rate will be adjusted accordingly.

So you might be offered a loan with a higher interest rate than what was advertised. This could be the case also if the lender feels that you are a riskier borrower.

Being rejected for a loan can make it harder to be accepted for credit by another lender. So, when one lender says no, they often all do. Moreover, it is important you check how much you are eligible to borrow before applying to avoid rejection.

Personal loans and arrangement fees

Some personal loans might have arrangement fees but the majority do not. This is a fee paid to the lender who helps you secure the loan. Arrangement fees are mostly observed in large borrowing with a high-risk perception. This usually makes loans expensive and it is best you avoid any lender who requires arrangement fees before lending to you.

Always shop around for the best deals

You should compare interest rates and terms from different lenders. This will give you a good reference point for who has the best deal in town. Don’t be afraid to call the lender representative and get the right information from them.

Sometimes the rates advertised might change without the public knowledge and it’s best to confirm first before committing to a lender.

The interest rate on a personal loan may vary depending on:
1. how much you want to borrow
2. your credit rating
3. the term
4. the loan provider
The longer you have to pay back your personal loan, the lower your monthly payments will be. But a longer term means you’ll end up paying more interest overall.

But, repaying your loan over a shorter time period means larger monthly payments. So, it’s important to work out what you can afford to pay each month.

It’s important to check that you can afford to repay any loan you take out. If you fail to make repayments it can get you listed in the CRB which will lead to you being blacklisted from borrowing again from any other institution.
11/11/2022
How to prepare a financial plan based on the current Kenyan economy
The Kenyan economy is currently going through a downturn that is touching on all aspects of Kenyan life. Inflation is touching double digits and is expected to worsen before the year ends.

When faced with uncertainty in the coming months one should prepare their finances to take advantage of every shilling that passes through their pocket. This can be achieved through a well-thought-out financial plan.

What is a personal financial plan?

A financial plan is a written document showing one’s current financial situation, financial goals, and how to achieve those goals. It puts into perspective the current cash flow from income. Everyone has an idea of what they expect to get from their earnings but few articulate a step-by-step roadmap on how to achieve their goals with their current and future earnings.

It is the job of a financial plan to give guidelines on how to fit your goals into your current and future income.

Also read: 6 Factors that Affect Loan interest rate in Kenya

What are the main components of a personal financial plan based on the Kenyan economy?

A good financial plan needs to be a simple document you can understand and follow easily and accurately. There are some components that each personal financial plan must have. This includes:

Financial Goals

A good financial plan should show what you expect from your money. These are the realistic goals you have set for yourself and how much they are likely to cost you to achieve them. The financial goals should have a rough estimate of how long you expect to accomplish this goal. This will push you to be more proactive in accomplishing them.

Financial goals should be realistic and reflect the current trajectory of your income. Financial goals that don’t take into account earning potential are likely to fail due to the burden they will cause on your income cash flow.

Keep them simple and realistic and you will be far more likely to accomplish them within the set timeframe.

Statement of your Networth

This is an audit of what you own currently. You need to evaluate the net worth of all your assets. To determine the worthiness of an asset you have to calculate the current market price of that item. If you found a willing buyer for the asset how much will you sell it for?

To get a statement of net worth you first have to take a full inventory of all your assets and write them down.

Next research the current market value of your fixed assets. This is not difficult since you will need to find a current sale of the same and compare the two.

Finally, determine the value of your intangible assets. Be careful to ensure you don’t undervalue intangible assets due to the lack of a standardized valuation method for them.

Now that you have the value of your assets, write down all the sources of all your income and get a monthly average if it varies from time to time. Next, take account of all your debts write them down and total them.

At this point, we can get the total value of our net worth by subtracting the net debt from the total assets. If the process is too tedious for you you can use online net worth calculators.

Earnings

Like any other business that has an income, a person’s earnings are no different. You might have more than one source of income and it’s important to understand how much they bring on average each month. It will give a clear picture of where you stand financially. Income includes:
- Salary
- Dividends from stocks and business profits
- Life insurance
Once you have your list you need to calculate the net income. This is the total amount earned in a specific period minus interest, taxes, and expenses. If you had any asset sold within the same period you should include it in the analysis since this is part of your income.

Before starting to make the financial plan you must understand why you are making it. It is often an overlooked aspect of financial planning that few seem to take into account.

Also Read: 7 things you need to know about Fixed Deposit Accounts in Kenya

Understanding why money is important to you

Before I start rattling strategies like an overzealous sales rep I would like to pose this question to you, why is money important to you? I know this might seem like a very obvious question after all poverty is the enemy. Rather, it is the way the question is answered that made me bring it up.

When asked this question most people will give you an offhand answer like freedom or escape poverty.

This is not enough since it does not give a specific problem you are trying to solve. Let’s be honest, a financial plan is aimed at solving a problem. I believe the more specific and honest you are with the end point of the plan the better you will be at executing it.

Money is an instrument. On its own, it has no use till you exchange it for the item or service you need. You don’t pay for a tool unless you have a specific use for it. Moreover, we can have the same tool but apply it to different uses. This is why your financial plan can never be the same as mine even though we are using the same tool to try to execute it.

A financial plan with a well-defined why will ensure that you use the tool to solve the problem it was intended for. It will translate to keeping yourself disciplined to follow through with what you have planned.

Discipline is a major factor in achieving the ambitious goals you set for yourself in the financial plan. Why not make it easier for yourself by having a well-articulated reason that will act as your guardrail when you feel overwhelmed with the execution plan? Keep this in mind when you try to answer this question.
04/11/2022