Hela Pesa Salary Loan

Tag: personal finance

  • Hela Pesa Shines at Think Business Digital Lender Awards: What It Means for Customers and the Industry

    Hela Pesa Shines at Think Business Digital Lender Awards: What It Means for Customers and the Industry

    Hela Pesa continues to cement its position as a leader in Kenya’s fast-evolving fintech space, following its recent recognition at the Digital Lender Awards hosted by Think Business. The company walked away with multiple accolades across key categories, a testament to its commitment to innovation, transparency, and customer-centric financial solutions.

    Among the standout wins was recognition for Fastest Growing Digital Lender, where Hela Pesa emerged as 1st Runner-Up. This category celebrates lenders demonstrating rapid and sustainable growth while maintaining service quality. For Hela Pesa, this reflects not just expansion in numbers but the ability to scale responsibly, reaching more Kenyans with accessible and reliable credit solutions.

    Additionally, Hela Pesa earned accolades in categories that underscore its dedication to operational excellence and customer trust. These awards highlight the brand’s strength in delivering seamless digital experiences, maintaining high standards of compliance, and prioritizing user satisfaction in an increasingly competitive market.

    Why These Wins Matter to Customers

    For customers, these awards are more than just trophies—they are a signal of trust. In a digital lending environment where concerns around data privacy, hidden charges, and predatory practices have been prevalent, recognition at credible platforms like the Digital Lender Awards assures users that they are engaging with a lender that values integrity.

    Hela Pesa’s recognition reinforces its promise of transparent pricing, quick disbursements, and customer-first service. Customers can feel confident knowing they are dealing with a lender that has been independently evaluated and ranked among the best in the industry.

    Moreover, awards tied to growth and innovation translate directly into better user experiences. As Hela Pesa expands, customers benefit from improved platforms, faster loan processing, and more tailored financial products designed to meet diverse needs from salaried employees to small business owners.

    Raising the Bar for the Industry

    The Digital Lender Awards play a crucial role in shaping the fintech ecosystem by setting benchmarks for excellence. By recognizing top-performing lenders like Hela Pesa, the awards encourage healthy competition and inspire other players to elevate their standards.

    For other digital lenders, participation in the Think Business Awards presents a valuable opportunity to gain industry recognition, build credibility, and showcase innovation. The process typically involves submitting detailed entries that highlight business performance, customer impact, governance practices, and technological advancements.

    To stand out, lenders must demonstrate measurable impact whether through financial inclusion, product innovation, or customer satisfaction. Transparency in operations and a clear value proposition are also key factors that judges consider.

    Beyond recognition, participation offers lenders visibility among investors, partners, and customers. It positions them as serious players in the market and opens doors for growth and collaboration.

    Looking Ahead

    Hela Pesa’s success at the Digital Lender Awards is more than a milestone; it’s a reflection of a broader mission to transform access to credit in Kenya. As the fintech landscape continues to evolve, such recognitions will remain essential in guiding consumers toward trustworthy providers and encouraging lenders to innovate responsibly.

    For customers, it’s reassurance. For the industry, it’s motivation. And for Hela Pesa, it’s only the beginning.

  • Hela Pesa Shines at the #DigitalLendersAwards2025, Taking Home Multiple Awards

    Hela Pesa Shines at the #DigitalLendersAwards2025, Taking Home Multiple Awards

    Hela Pesa has been recognized among Kenya’s top-performing fintech firms at the #DigitalLendersAwards2025. This annual industry event celebrates excellence in innovation, transparency, and customer-centricity within the digital lending space.

    The company secured two trophies and three certificates across three competitive categories, underscoring its growing influence in Kenya’s rapidly evolving financial services sector.

    Hela Pesa was named 1st Runner Up in the Fastest-Growing Digital Lender category, highlighting its strong market expansion and increasing customer uptake. The recognition reflects the company’s ability to scale its operations while maintaining efficiency and accessibility in its lending solutions.

    In the customer experience category, Hela Pesa emerged as 2nd Runner Up for Best Digital Lender in Customer Experience, a nod to its continued investment in seamless user journeys and responsive service delivery. As customer expectations shift towards speed, simplicity, and reliability, the award signals the company’s alignment with evolving market demands.

    The firm also ranked fifth in the Digital Lender with the Best Net Promoter Score (NPS) category, a metric widely used to gauge customer satisfaction and loyalty. This placement indicates strong customer approval and positions Hela Pesa among the most trusted digital lenders in the country.

    The #DigitalLendersAwards2025 brought together key stakeholders in Kenya’s fintech ecosystem, including regulators, industry leaders, and emerging players, to recognize organizations that are setting benchmarks in responsible and inclusive lending.

    Industry analysts note that awards such as these play a crucial role in distinguishing credible players in a crowded market, where trust and transparency remain critical factors for consumers. Hela Pesa’s performance reflects broader trends in the sector, where firms are increasingly leveraging technology to improve access to credit while enhancing user experience.

    In recent years, Kenya has seen significant growth in digital financial services, driven by increased mobile penetration and demand for convenient financial solutions. Within this landscape, lenders are under pressure to not only innovate but also demonstrate accountability and customer focus.

    Hela Pesa’s recognition at this year’s awards signals its continued commitment to these principles. By focusing on customer needs, operational efficiency, and sustainable growth, the company is positioning itself as a key player in shaping the future of digital lending in Kenya.

    As competition intensifies, such industry acknowledgments are expected to influence consumer perception and investor confidence, further reinforcing the importance of performance-driven recognition in the fintech space.

    With its latest wins, Hela Pesa joins a growing list of firms that are redefining financial access in Kenya, setting the stage for the next phase of innovation in digital lending.

  • Kenya Police, Prisons and NYS Officers to Receive Salary Increase in July 2026 – Full Pay Details

    The Kenyan government has announced a major salary increase for officers serving in the country’s disciplined services, including the National Police Service, Kenya Prisons Service, and the National Youth Service (NYS). The final phase of the salary review is scheduled to take effect in July 2026, marking a significant boost in earnings for thousands of officers across the three institutions.

    The pay rise forms part of the government’s broader effort to improve the welfare of security personnel and youth service officers who play a critical role in maintaining national security, rehabilitation, and youth empowerment. Once fully implemented, the revised salary structure will significantly raise earnings across both entry-level and senior ranks.

    Police Constables to Earn Up to KSh57,700

    Under the new salary structure, a police constable, the entry-level rank in the National Police Service, will earn up to KSh57,700 per month, up from the previous maximum of KSh38,975. This represents a 48 percent increase, making it one of the most notable adjustments in the latest government pay review.

    The salary adjustment is expected to improve the financial stability of officers who often face demanding working conditions and long hours in service to the public.

    For newly graduated police constables entering the service, the starting salary will also increase significantly. New recruits will earn KSh29,296, up from the previous KSh20,390, reflecting a 44 percent salary increase. The adjustment aims to make the police service more attractive to young Kenyans considering careers in law enforcement.

    NYS Officers to Benefit from Higher Entry-Level Salaries

    Officers serving in the National Youth Service (NYS) will also benefit from the revised salary structure. Those in the lowest cadre will now earn between KSh26,222 and KSh37,912 per month, up from the previous salary range of KSh19,800 to KSh32,315.

    The NYS plays an important role in equipping young people with vocational skills, discipline, and employment opportunities. The salary increase is expected to improve the morale of officers and instructors who oversee training programs and youth development initiatives across the country.

    Higher Salaries for Senior Officers

    Senior officers in the disciplined services will also see significant salary improvements under the new structure. The highest-ranking officers in the National Police Service will now earn up to KSh345,850 per month, up from the previous KSh289,090.

    This increase reflects the government’s recognition of the leadership responsibilities and operational oversight required at senior command levels.

    Meanwhile, top-ranking officers in the Kenya Prisons Service will receive some of the highest pay under the new structure. Their monthly salaries will range between KSh301,548 and KSh584,903, depending on rank and level of responsibility.

    Prisons officers play a crucial role in managing correctional facilities, ensuring inmate rehabilitation, and maintaining security within correctional institutions. The salary adjustments are expected to strengthen motivation and professional performance within the service.

    Boosting Welfare in Disciplined Services

    The government’s decision to implement the final phase of the salary increment in July 2026 is expected to positively impact thousands of officers and their families. Improved pay is often linked to higher job satisfaction, reduced financial stress, and better service delivery.

    Over the years, calls for improved welfare among security personnel have intensified, with officers highlighting the challenges of rising living costs and the demanding nature of their duties.

    By increasing salaries across various ranks in the National Police Service, Kenya Prisons Service, and NYS, the government hopes to enhance motivation, attract qualified recruits, and strengthen professionalism in the disciplined services.

    As the implementation date approaches, the new salary structure is likely to bring renewed optimism among officers who serve on the frontlines of national security, correctional services, and youth development programs across Kenya.

  • Civil Servant Loans in Kenya

    Civil Servant Loans in Kenya are financial products tailored specifically for government employees, offering favorable terms to help them manage their financial needs. Given the stability and reliability of civil servant employment, many financial institutions in Kenya provide specialized loan packages for this group, making it easier for them to access credit at lower interest rates, with flexible repayment terms.

    Institutions Offering Civil Servant Loans in Kenya

    Hela Pesa Salary Loan

    Hela Pesa is a digital lending platform in Kenya that provides various loan services, including salary loans. This service is particularly aimed at salaried employees, such as civil servants, who need quick access to funds before their next payday. Hela Pesa operates primarily through mobile platforms, offering convenience and speed in accessing financial support.

    Instant Loans: Hela Pesa offers instant salary advances to help employees cover unexpected expenses before payday. The application process is simple, and loans are disbursed quickly.

    Flexible Loan Amounts: The loan amounts available vary depending on the applicant’s salary and repayment capacity. Hela Pesa uses the salary information to determine the loan limit.

    Short-Term Repayment: Salary loans are typically short-term, with repayment automatically deducted from the borrower’s next paycheck. This makes the loan easy to manage, as repayments are automatically handled.

    Low Interest Rates: As a salary loan provider, Hela Pesa offers competitive interest rates compared to traditional payday lenders, making it a more affordable option for salaried employees.

    Eligibility: To qualify for a Hela Pesa salary loan, applicants usually need to provide proof of employment, such as a payslip or employment contract. The applicant’s salary account must also be linked to the loan provider for automatic repayment.

    Mobile-Based Application: The entire loan application and management process can be done via mobile phone, ensuring that borrowers can apply and repay loans from anywhere at any time.

    Commercial Banks

    • Several banks in Kenya, such as KCB (Kenya Commercial Bank), Cooperative Bank, and Equity Bank, offer dedicated loan packages for civil servants. These banks provide a wide range of loan products, including personal loans, mortgages, and car loans, with favorable terms.

    SACCOs

    • SACCOs are popular among civil servants because they offer lower interest rates and more flexible terms compared to traditional banks. Some SACCOs specifically cater to government employees, such as the Mwalimu National SACCO (for teachers) and Stima SACCO (for employees in the energy sector).

    Government-Backed Loan Programs

    • The Kenyan government has launched several initiatives to support civil servants, including low-cost mortgage schemes and affordable credit facilities to help them improve their financial well-being.

    Types of Loans Available for Civil Servants in Kenya

    1. Salary Advance Loans:
      • These loans provide civil servants with an advance on their salary, allowing them to access funds before their payday.
      • Typically, these loans are short-term, with repayments being deducted directly from the borrower’s next salary.
      • Interest rates on salary advances are often low, and approval is usually fast.
    2. Personal Loans:
      • Personal loans for civil servants can be used for various needs, such as medical bills, home renovations, or educational expenses.
      • These loans generally offer longer repayment terms, with repayments deducted monthly from the borrower’s salary.
      • Interest rates are competitive, and loan amounts are based on the borrower’s income and ability to repay.
    3. Mortgage Loans:
      • Civil servants in Kenya can access home loans to purchase or build houses.
      • These mortgage loans typically have longer repayment periods, often extending up to 20 or 25 years, with relatively lower interest rates compared to the private sector.
      • Many banks and SACCOs (Savings and Credit Cooperative Organizations) in Kenya offer specialized mortgage plans for government employees.
    4. Car Loans:
      • Car loans allow civil servants to purchase vehicles with flexible repayment options.
      • These loans can cover up to 90% of the car’s value, and repayments are spread over a few years, with the interest rate and repayment period dependent on the borrower’s financial situation.
    5. Emergency Loans:
      • Emergency loans cater to urgent, unforeseen expenses such as medical emergencies, funerals, or sudden repairs.
      • These loans are processed quickly and offer civil servants immediate access to funds in times of need.
      • The repayment terms are usually short, with direct deductions from the borrower’s salary.
    6. Education Loans:
      • Education loans are available to civil servants who wish to further their education or fund their children’s education.
      • These loans typically have favorable interest rates and longer repayment periods to ease the financial burden on the borrower.

    Features and Benefits of Civil Servant Loans in Kenya

    1. Competitive Interest Rates:
      • Civil servants enjoy lower interest rates compared to those offered to individuals in the private sector. This is due to the perceived job security and stable income of government employees, which lowers the risk for lenders.
    2. Automatic Salary Deductions:
      • Repayments are often made through check-off systems, where loan payments are deducted directly from the civil servant’s salary. This reduces the risk of default and ensures consistent repayment.
    3. Flexible Repayment Periods:
      • Loan repayment periods for civil servants can be extended, sometimes up to 84 months or more, depending on the type of loan. This allows for manageable monthly payments, easing the financial burden on borrowers.
    4. Quick Processing and Approval:
      • Many lenders have streamlined loan approval processes for civil servants, resulting in faster disbursements. This is especially beneficial for loans needed in emergencies or for time-sensitive purchases.
    5. Higher Loan Limits:
      • Given their stable employment status, civil servants may qualify for higher loan amounts compared to individuals in the private sector.

    Eligibility and Requirements

    To qualify for a civil servant loan in Kenya, applicants typically need to meet the following criteria:

    • Employment: Must be a confirmed civil servant, with a valid employment contract or letter from the employer (e.g., Teachers Service Commission, National Police Service, Ministry of Health).
    • Salary Account: Must have a salary account with the lending institution or be willing to open one.
    • Age: Must be within the working age limit, typically between 18 and 60 years old.
    • Credit History: Some lenders may check the applicant’s credit history with the Credit Reference Bureau (CRB) to ensure they have a good repayment track record.

    Conclusion

    Civil servant loans in Kenya provide an essential financial service to government employees, offering them access to credit with favorable terms. These loans are designed to help civil servants meet both their personal and professional financial needs, from emergencies to long-term investments like housing and education. Through partnerships with banks, SACCOs, and government programs, civil servants can access tailored loan products that support their financial stability and growth.

  • Race to Financial Freedom: 9 Habits to Get You There

    Race to Financial Freedom: 9 Habits to Get You There

    Achieving financial freedom is a journey that requires discipline, commitment, and smart financial habits. Here are nine habits to help you reach financial freedom:

    1. Set Clear Financial Goals

    Setting clear financial goals is the foundation of financial planning. It involves identifying specific objectives, such as saving for retirement, buying a home, or building an emergency fund, to provide direction and motivation for your financial journey.

    Clear financial goals serve as a roadmap, guiding your financial decisions and behaviours. They help prioritize your spending and saving, ensuring that your resources are allocated effectively towards achieving your objectives. Without clear goals, it’s easy to lose focus and drift aimlessly in your financial life.

    Regularly review and reassess your financial goals to ensure they remain relevant and achievable. Monitor your progress towards each goal, tracking your savings, investment growth, and milestones reached. Adjust your goals as needed based on changing life circumstances or financial priorities.

    2. Create a Budget and Stick to It

    Creating a budget involves planning and tracking your income and expenses to ensure that your spending aligns with your financial goals. Sticking to a budget helps you live within your means and prioritize your spending based on your values and priorities.

    A budget provides a clear overview of your financial situation, highlighting areas where you may be overspending or undersaving. It allows you to make informed decisions about where to allocate your resources, helping you avoid debt, build savings, and work towards your long-term goals.

    Regularly review your budget to track your actual spending against your planned budget. Identify any discrepancies or areas where you may be overspending and adjust your budget accordingly. Monitor your progress towards your savings goals and make adjustments as needed to stay on track.

    3. Pay Yourself First

    Paying yourself first involves prioritizing saving by setting aside a portion of your income before paying for other expenses. This habit ensures that saving becomes a non-negotiable expense and helps you build a financial cushion for the future.

    By paying yourself first, you prioritize your long-term financial security and goals over short-term spending. It helps cultivate a savings mindset and ensures that you consistently allocate resources towards building wealth and achieving financial freedom.

    Monitor your savings contributions to ensure that you’re consistently paying yourself first. Automate your savings transfers to make it easier to stick to this habit. Regularly review your savings accounts to track your progress towards your savings goals and adjust your contributions as needed.

    Also read: A Salary loan in Kenya

    4. Live Below Your Means

    Living below your means involves spending less than you earn and avoiding lifestyle inflation. It requires discipline and conscious decision-making to prioritize savings and investments over unnecessary expenses.

    Living below your means is essential for building wealth and achieving financial freedom. It allows you to save and invest more, increasing your financial security and flexibility. By avoiding excessive spending, you reduce financial stress and increase your ability to weather economic downturns or unexpected expenses.

    Regularly track your spending and expenses to ensure that you’re living below your means. Identify areas where you can cut back or reduce expenses to increase your savings rate. Monitor your debt levels and avoid taking on unnecessary debt that could hinder your ability to live below your means.

    5. Invest Wisely for the Long Term:

    Investing wisely for the long term involves allocating your resources into assets that have the potential to grow in value over time. It requires understanding your risk tolerance, diversifying your investments, and adopting a disciplined approach to investing.

    Investing is essential for building wealth and achieving financial freedom. It allows your money to work for you, generating returns and compounding over time. By investing for the long term, you can harness the power of compound interest and grow your wealth steadily over time.

    Regularly review your investment portfolio to ensure that it remains aligned with your financial goals and risk tolerance. Monitor the performance of your investments and make adjustments as needed to optimize your returns. Stay informed about market trends and economic developments that could impact your investment strategy.

    By adopting these nine habits and consistently implementing them in your financial life, you can set yourself on the path to achieving financial freedom and enjoying greater control over your financial future.

  • 6 reasons why you should hire a professional financial planner

    6 reasons why you should hire a professional financial planner

    Navigating the complexities of personal finance can be daunting, particularly as financial landscapes evolve and individuals face increasingly diverse investment options and retirement considerations. In this intricate realm, a professional financial planner emerges as a beacon of expertise and guidance.

    Who is a Financial Planner?

    A financial planner is a trained and certified professional who specializes in helping individuals and families manage their finances effectively. Their primary objective is to assist clients in achieving their financial goals, whether it’s saving for retirement, purchasing a home, funding education, or building wealth for the future. Financial planners employ a comprehensive approach, taking into account various factors such as income, expenses, assets, liabilities, risk tolerance, and long-term objectives to craft personalized strategies.

    What do they do?

    The job of a financial planner encompasses a wide array of responsibilities, all aimed at providing clients with sound financial advice and strategies tailored to their unique circumstances. Here are six reasons why hiring a professional financial planner can be invaluable;

    1. Financial Expertise

    Financial planners possess specialized knowledge and expertise in various aspects of finance, including investment management, tax planning, and risk management.

    Given the complexity and ever-changing nature of financial markets, having a professional with deep expertise is crucial. Financial planners can analyze market trends, identify opportunities, and navigate risks effectively on behalf of their clients.

    With their expertise, financial planners can devise customized strategies that optimize clients‘ financial situations, maximize returns, and minimize risks. This expertise ensures that clients receive informed guidance tailored to their specific needs and goals.

    2. Goal Setting and Planning

    A fundamental aspect of financial planning is setting clear, achievable goals and developing strategies to reach them.

    Many individuals struggle to articulate their financial goals or develop actionable plans to achieve them. Financial planners facilitate this process by guiding clients through goal-setting exercises and creating personalized financial plans aligned with their aspirations.

    By helping clients define their financial objectives and creating roadmaps to achieve them, financial planners empower individuals to take control of their financial futures. This clarity and direction increase the likelihood of success in reaching long-term financial goals.

    3. Risk Management

    Financial planning involves assessing and mitigating various risks that could impact an individual’s financial well-being.

    Unexpected events such as market downturns, illness, or disability can have significant financial implications. Financial planners evaluate clients’ risk tolerance and implement strategies to protect against these risks, ensuring their financial security.

    Financial planners help clients safeguard their assets through prudent risk management strategies and achieve greater financial resilience. This proactive approach minimizes the impact of adverse events and preserves clients’ long-term financial stability.

    4. Investment Management

    Building and managing investment portfolios is a core aspect of financial planning, aimed at achieving clients’ financial goals.

    Constructing a well-diversified investment portfolio requires expertise in asset allocation, security selection, and risk management. Financial planners leverage their knowledge and experience to design portfolios tailored to client’s objectives and risk preferences.

    By overseeing clients’ investment portfolios and making strategic adjustments as needed, financial planners aim to optimize returns while mitigating risks. Their proactive management ensures that clients’ investments remain aligned with their financial goals and evolving market conditions.

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

    5. Tax Planning

    Tax planning is integral to financial planning, as it aims to minimize clients’ tax liabilities and optimize their after-tax returns.

    Taxes can significantly erode investment returns and overall wealth accumulation. Financial planners employ various tax-efficient strategies to help clients maximize deductions, minimize tax liabilities, and optimize their overall tax situation.

    Through effective tax planning, financial planners help clients retain more of their hard-earned money and enhance their overall financial outcomes. By structuring investments and transactions in a tax-efficient manner, they ensure that clients’ wealth is preserved and enhanced over time.

    6. Ongoing Monitoring and Adjustments

    Financial planning is a dynamic process that requires regular monitoring and adjustments to remain effective.

    Financial markets and individual circumstances can change rapidly, necessitating ongoing review and adaptation of financial plans. Financial planners provide continuous monitoring and make necessary adjustments to ensure that clients remain on track to meet their goals.

    By staying actively engaged in clients’ financial lives and making timely adjustments to their plans, financial planners help mitigate risks, capitalize on opportunities, and optimize outcomes. This ongoing support fosters greater financial confidence and resilience, even in the face of uncertainty or market volatility.

  • Buying school supplies Now will be the best decision you’ll ever make. Here’s why

    Buying school supplies Now will be the best decision you’ll ever make. Here’s why

    Remember Loci? Surds? High school maths? Congratulations, me neither. But even as we indulge in selective amnesia, I think you will agree that school is an indispensable part of modern life. Had it not been for school, most wouldn’t be where they are, wherever that is. That’s good. The bad comes when we have to buy supplies for our children at the beginning of every school year. The ugly is when we have to pay school fees.

     Now, I know we’re in Ditheba, in a festive mood, ready to Parte and I’m probably ruining that now but come January 18th, the weirdly crazy, bitter reality will set in and have you queue in bookshops and tailor shops everywhere looking to buy school supplies for CBC and 8-4-4 manenos. Tempers will flare and enough anger will be burnt to probably cause flash floods in Antarctica.

     I have a secret that will get you out of the impending jam and since I care about you, I’ll let you into it. OK, listen (or read) carefully. To avoid all the hassle that comes with January shopping, buy your school supplies now. Capisce?

    Here’s why:

    You are (probably) not broke now

    The Kenyan calendar is the third most unique after the Ethiopian calendar. Ethiopians are in 2015 and we have Njaanuary. That dreaded month that people loathe, and wish to purge off the calendar and have it burn in hell in the company of rainy Mondays. For a majority, this is a month of intense heat, unrelenting brokenness, empty wallets, and small fortunes to pay back to Fuliza and its ilk. What’s worse, they have restored the academic calendar to default settings. Meaning that kids will be heading back to school when you’re at your most broke.

    However, I’m thinking that you’re not as broke now as you will be in January. After all, you have a Hustler Fund Loan. And the best way to use that money would be to do school shopping now. As Warren Buffet once quipped, be greedy when others are fearful, and be fearful when others are greedy. Now is the time to be fearful of spending all your money on merriment. People are greedily spending their cash to indulge themselves, which is a terrific thing, and while I do not wish to be Jeremiah tough times are coming. Do your school shopping now rather than in January and I promise you will not regret it.

    If, however, you are strapped for cash, head over to our website or to the Play Store and download our app. We will sort you out to enable you to buy the books, pens, and Daddie’s new uniform. This way, your loan will quickly be paid via a check-off account for tangible school shopping you can see, rather than have Fuliza gobble up your cash for a hangover you only felt and probably hated.

    You will have premium peace of mind

    The keyword here is premium. The hassles and jostles of January school shopping have seen marked depression among parents to the extent that some have had to take anti-depressants. But that doesn’t need to happen to you, because I know you are smart.

    In the space that is post-modernity, mental health, and wokeness, your peace of mind is the most valuable thing you can have. After all, everything in your life hinges on your sanity, right? Improving mental health does not need to happen in large dollops or in big swoops but in small pellets and little sips. Taking one step at a time, for example by shopping for school materials now will help improve your mental well-being.

    Come January, parents will face the double-edged sword of school fees and shopping with virtually no defence. You, however, will only face a single-edged sword that is school fees. Meaning that you will have a fifty per cent chance of surviving January with your peace of mind intact. Those are odds I’d be very comfortable wagering on.

    You will save money

    This is the Holy Grail of shopping. Saving money. And there is no better way to save than to be early, correct? This especially rings true for seasonal goods like books, pens, and other school supplies. The thing with seasonal goods is that their demand and supply rise and fall based on the time we need them the most. For gumboots and umbrellas, it is during the rainy season. For school supplies, it is January.

    Buying seasonal goods when their peak demand has not been reached yet or has passed is the best way to save cash. Now, for school supplies, they are best bought before they are needed and that is now. Coupled with the need for stock turnover retailers might get you very good deals on them. This, though, will require you to be in the right place at the right time doing the right thing. Which is shopping for your school supplies now before there is a shift and movement in the curves of demand and supply. Head on to Jumia to see what I’m talking about.

    You will have choices

    Shopping early gives you an array of choices. Since you will not be scrambling with other shoppers for goods that are not available because of artificial shortages and hoarding, you will have the pick of the litter. This allows you manoeuvrability in terms of the quality of products that you want to buy, ensuring that you give your children a better start.

    Having a choice further enables you to dodge shortages that might cause havoc to your otherwise impeccable budget. If you are a stickler for quality products, shortages will see you spending more than you anticipated or, conversely, have you buy low-quality products on the market. Either of these routes will see you spend more in the long run and in this era of high inflation, spending more will derail you badly.

    To avoid all this shop early, shop now.

  • 4 ways you can waste your salary and how you can stop it

    4 ways you can waste your salary and how you can stop it

    4 ways you can waste your salary and how you can stop it

    The man who invented money should be raised from the dead and awarded a Nobel Peace Prize. If not, then he should be awarded one posthumously. Were it not for him, the world of commerce would have been cold, dark, and uninhabitable, devoid of any currency. From the moment we conceptualized that we can exchange a few cowrie shells for whatever we wanted, a much-needed ray of sunshine penetrated an otherwise dank existence that was batter trade.

    Since then money, in its numerous forms, has occupied human thought throughout the millennia. It has not only made commerce easier but also ensured that people do whatever they want as they’re compensated. From the time of the Industrial Revolution, the notion of salary has been the top thought in a working man’s mind. Were it not for money, very few, if any would risk trudging through the waking cycles to go to work on Monday.

    As such, careful spending of your hard-earned money should be a priority. But like most humans, advice follows the path of least resistance going from one ear to the other without having any interaction at all with the brain. Careful spending is thrown out of the window as we let wastefulness in, not knowing that we’re reducing the quality of our lives.

    Here are some of the ways we waste what we’ve worked hard for, and thankfully, how we can avoid it.

    Not negotiating with your employer

    This is probably one of the most overlooked methods of wasting your salary. It’s so featureless and colorless, we never see it at all. The goal of wastage, especially money, is to leave you with less of something, thus causing an inadequacy. Not negotiating enough for your salary smacks right into this. Having less salary, and especially having less because you never negotiated for it, can set you back severely. Though this might not be an active method of wastage, it has brought misery and frustration to new employees when they realize that what they earn is barely enough to support them.  If you do not wish to work for peanuts, negotiate for your salary to ensure that you are paid your work\’s worth.

    Now, I know that work is very scarce nowadays and with the evil twins of post-Covid times, little work and inflation holding the world by the throat, landing a job however unfulfilling, can produce feelings of achievement and exhilaration. However, you shouldn’t forget that you are working for pay. Unless you are in the “find what you love and you’ll never work a day” brigade, chances are that you are working an uninspiring job if only to put food on the table.

    Life doesn’t start or end with putting food on the table. You must be compensated for the amount of work you do, and that means that you must negotiate with your employers when it comes to your salary.

    Keeping up with the Whoever

    This is the sure bet of wasting money and salary. Keeping up with the [insert rich neighbor\’s name], will not only waste your money faster than a sieve can leak but will probably cause you extremely high blood pressure. You have a right to live comfortably. That I agree with, but buying a washing machine because [reuse name here] bought a French-door Samsung refrigerator with Sabbath mode, when your gross untaxed salary is 50,000 blurs the line between madness and stupidity.

    You must live within your bounds if you are to plug wastages that needlessly eat into your salary. Boundless comfort is for billionaires, and dollar billionaires for that matter, which I know you ain’t. Stick to your lane and drive your money according to your level of richness. This statement shouldn’t limit your imagination though. If you need more money, or if your comfort levels cannot fit into your salary, you can look for an extra source of income. Borrowing to touch up your image is a no-no. But you are allowed to borrow to start a business to get more money to finally live like your neighbors. Please head over to our website to register and we’ll give you an unsecured loan to make your dreams come true.

    Excessive indulgence

    There are three types of people in the world. Those who keep meticulous budgets, those who don’t, and those who don’t even know what I’m talking about. But like all things human, this difference is but superficial for there is only one thing that unites them: Entertainment money. This money does crazy things, some are even censored in Hell. Some slot it into their budgets while others spend willy-nilly, not caring where the bill might fall. I’m guessing a large majority are the willy-nellies as Entertainment money has been known to take up as much as 150% of some salaries.

    I am a nice guy, and thus not inclined to crimp the roundedness of your mojo, but if you do not want to murder your salary, I’d suggest you limit your portion of Entertainment money. I have a clear understanding that Kenya runs on Alcohol on weekends but too much entertainment, be it liquid or smoked or live or whatever form your entertainment is, is not only bad for your health but is known to cause one of the worst conditions of the 21st century: Poverty.

    Emotional Spending

    Man is a creature that craves comfort, whether emotional or physical. And if he cannot find it naturally, then he is apt to want to buy it. And for some reason, if he finds he is addicted to it, he\’ll pursue it even with the possibility of destruction. Buying indiscriminately as a means to chase emotional comfort is one way to destroy your hard-earned money. Though it\’s advisable to gift yourself now and then, it’s a pure danger to be dependent on it, as this will make you buy things that you absolutely have no use for. This will make you look and sound not just vain but probably financially illiterate in the end.

    Conclusion

    Cutting back on spending might be a difficult job, and I hear you. But like all good things, they take time, cost too much in terms of emotional price, and have no business associating with a sane human. If you take time, however, and practice, you will overcome. Work hard and you’ll see the fruits of your labor.

  • The Good, the Crazy, and the Weird of lending to family and friends

    The Good, the Crazy, and the Weird of lending to family and friends

    Money is an integral part of human life, touching every aspect of human existence. As old as money itself is the art of lending. From the dawn of commerce, people have lent each other money and that trend is not about to die. Financial institutions lend us approximately 403 billion shillings in 2023, showing how much lending is entrenched in our lives.

    Though financial institutions have no qualms about lending us money, a good percentage of that lending occurs informally between family and friends. This informality is sometimes necessitated by the idea that lending folks we know, is better for reasons known only to psychology and Advanced Economics. At other times, though, ni kwa sababu wako CRB and thus banks, for a lack of a better word, hate them.

    I’m going to assume that you have friends and family and that means that at some point you’ve had to lend. Lending to family and friends, like everything in life, is not expressly good or bad, but rather like a pendulum swings from good to sometimes absolutely crazy. Thus, as you prepare to lend, you must be aware of the three sides of the coin of borrowing, from the smile-inducing to the cringe-worthy.

    The Good of lending to family and friends

    Fostering deeper and more meaningful relationships

    Lending money to family and friends brings people closer. Probably much closer than love. Show me a man who professes not to love money, and I’ll show you a seven-wheel car. They just don’t exist. Lending money if done right has the likelihood of forging and fostering meaningful relationships amongst family and friends.

    This is because lending money usually is preceded by a given set of problems and therefore when someone comes to you umsort, and for some crazy reason you do it, then to them, you are a god. You become their hero, to the extent that they might even die for you just as long as they don’t lose their lives.

    Further lending money provides you with a platform to teach your potential borrowers about issues such as prudent money management, and financial responsibility. Treat softly on this last one. Nobody likes to be lectured, no matter what their certificates say.

    Also read: A Salary loan in Kenya

    You might be lent when you need it

    Lending money to friends and family sets you up, but sometimes not in a bad way. We all need help. It’s our nature. No human is complete unto themselves unless they\’re a work of art, which of course, they\’re not. Needing and, most importantly, getting financial help can be as painless as it can be but only if you also help. Being approachable, and lending people money now and then, will enable you to get help when you need it.

    However, and I cannot stress this enough, never lend to borrow in the future. If that’s your plan, then I suggest that you procure yourself a nice, big fat vale to fill with your teary disappointments. Humans are funny and some are selfish, only happy with what they can gain. Thus, if you’re prepared to lend do not expect to be lent.

    And if you’ve tried to borrow from family and it’s hit a wall, head over to our website or download our app from the play store and register for a Salary Advance. We will sort you out because we understand that sometimes you need the cash.

    The Crazy

    Repayment might never come

    We’re African. Those two words have multiple folds of hidden meanings that if unraveled can spawn books that could fill the whole world. In the financial context, they mean that how we act in and around money is very different. Money borrowed from family is sometimes never to returned. And that’s that. No matter what financial websites preach and exhort, telling you how you should hammer out a repayment plan with your family before you lend and other financial jawing, we know that it’ll never happen.

     When lil’ bro tells you umsort atakurudishia baadaye, consider that money gone into the ether. That baadaye might occur in the post-apocalyptic world. And when you start hounding him to repay you, brandishing the repayment plan, then you and your money might become the subject of intense study, producing subject matter experts into pockets of your life you never knew even existed.

    So, when lending money, especially to family and friends, you should be aware that it’s not a boomerang.

    You might go broke

    We all love to help but even as you do, you must be careful that you do not over-extend the reach of your finances. Nobody (except sadists) wants to see their loved ones suffer, especially if they can help it. When friends come to you with a certain problem asking for a small loan, you might be inclined to lend. After all, that’s what friends are for.

    If you extend help further that it was designed to go, the likelihood of going broke and landing in debt out of the goodness of your heart might be a real possibility. Too much of a good thing, as they say, might not be good for your health. Be careful.

    The Weird

    You might be resented or even hated

    The fastest way to ruin a perfectly good relationship, be it family or friends, is to ask for ile pesa nilikusaidia. People LOVE borrowing, but absolutely loathe paying back. This is more so for money borrowed from family and friends. Social media is awash with overgrown tales of money borrowed and not repaid. For some reason, not yet understood by academics, people are comfortable paying bank loans without batting an eye, but turn into thermonuclear warheads when it is time to pay what they borrowed from family and friends.

    So, when you extend a loan to Brayo, know that wanting it back might not only irreversibly damage your friendship but also subject you to a resentment that stinks to the high heavens. God might buy have to buy an air freshener.

    Nobody might lend you when you need it

    Lending money to family and friends distorts the lens they use to view you. They’ll think you’re rich and rich people never need financial help, right? When the title of the Family Bank has been unofficially conferred to you, Mon Ami(e), you’re doomed.

    When you lend, therefore, beware that people are not inclined to be as compassionate as you are. But, as the Good Book says, blessed is the hand that gives. Give freely but only if you can afford to lose it.

  • Types of check-off loans

    In Kenya, check-off loans are a type of loan provided by an employer to an employee, with the loan payments being deducted directly from the employee\’s salary. The employer acts as a facilitator of the loan, as they are responsible for deducting the loan payments from the employee\’s salary and forwarding the payments to the lender. Check-off loans can be a convenient way for employees to access credit, as the loan payments are automatically deducted from their salary, making it easier for them to manage their finances.

    There are several different types of check-off loans that may be available in Kenya, including personal loans, car loans, and mortgage loans. Personal loans are unsecured loans that can be used for a variety of purposes, such as paying off debt, making home improvements, or financing a vacation. Car loans are used to finance the purchase of a new or used vehicle and may be offered by the car dealership or through a third-party lender. Mortgage loans are used to finance the purchase of a home, and may be offered by a bank or other financial institution.

    The specific terms and conditions of check-off loans vary depending on the type of loan and the lender. Some common terms and conditions include:

    Personal loans: Personal check-off loans may have loan amounts ranging from KES 10,000 to KES 2 million, with repayment periods of up to 48 months. Interest rates may range from 12% to 24%, and fees and charges may include an origination fee, a processing fee, and a late payment fee.

    Car loans: Car check-off loans may have loan amounts ranging from KES 200,000 to KES 4 million, with repayment periods of up to 72 months. Interest rates may range from 8% to 18%, and fees and charges may include a processing fee, a disbursement fee, and a late payment fee.

    Mortgage loans: Mortgage check-off loans may have loan amounts ranging from KES 1 million to KES 50 million, with repayment periods of up to 20 years. Interest rates may range from 8% to 14%, and fees and charges may include a processing fee, a legal fee, and a valuation fee.

    Education loans: These loans are used to finance the cost of education, such as tuition fees and living expenses. Education check-off loans in Kenya may have loan amounts ranging from KES 50,000 to KES 500,000, with repayment periods ranging from 5 to 15 years.

    It is important for both employers and employees to carefully review the specific terms and conditions of a check-off loan before agreeing to it. Employers should ensure that the terms of the loan are fair and reasonable and that the employee fully understands the terms of the loan and any potential consequences of defaulting on the loan.

    Employees should be aware of the total cost of the loan, including any fees or charges, and make sure that they can afford the loan payments before agreeing to the loan. In addition, it is important for employers to ensure that they are complying with all relevant laws and regulations in relation to check-off loans in Kenya. This includes obtaining any necessary licenses or permits and ensuring that the loan is properly documented and recorded.

    Eligibility criteria for check-off loans

    In Kenya, check-off loans are a type of loan offered by an employer to its employees, where the loan repayments are deducted directly from the employee\’s salary. These loans are often offered as an employee benefit and are usually unsecured, meaning they do not require collateral.

    Eligibility for check-off loans in Kenya may vary depending on the lender and the specific terms and conditions of the loan. However, there are generally some common criteria that borrowers must meet in order to be eligible for a check-off loan.

    • Employment status: In order to be eligible for a check-off loan, the borrower must be an employee of the company offering the loan. The borrower may need to provide proof of employment, such as a letter of employment or pay stubs. This requirement ensures that the lender has a source of repayment for the loan, as the loan repayments are deducted directly from the borrower\’s salary.
    • Length of employment: Some lenders may require borrowers to have been employed with the company for a certain period of time before they are eligible for a check-off loan. This requirement may vary depending on the lender and the specific loan terms, but is typically meant to ensure that the borrower has a stable job and is likely to continue to receive a salary for the duration of the loan.
    • Credit score: Some lenders may require borrowers to have a good credit score in order to be eligible for a check-off loan. A good credit score may be considered to be above 650, depending on the lender. This requirement is meant to ensure that the borrower has a history of responsible borrowing and is likely to repay the loan as agreed. Borrowers with a poor credit score may still be eligible for a check-off loan but may be required to pay a higher interest rate or provide collateral as security for the loan.
    • Income: Lenders may also consider the borrower\’s income when determining eligibility for a check-off loan. Borrowers may need to demonstrate that they have a stable income and are able to afford the loan repayments. This requirement is meant to ensure that the borrower is able to meet their financial obligations and is not taking on more debt than they can handle.
    • Age: Some lenders may have age requirements for check-off loans, with borrowers typically needing to be over 18 years of age. This requirement is meant to ensure that the borrower is of legal age and able to enter into a binding contract for a loan.

    In addition to these common eligibility criteria, borrowers may also need to meet any additional requirements set by the lender, such as providing proof of identity, proof of residence, or other documentation. It is important for borrowers to carefully review the eligibility criteria for check-off loans before applying, in order to understand the requirements and ensure that they meet them. Borrowers who do not meet the eligibility criteria may be rejected for a check-off loan or may need to explore other options for borrowing.

  • Saving Challenge 2024: How you can save money in the new year

    Are you tired of watching your hard-earned money slip through your fingers each month? Then I think it’s time to take control of your finances and start saving. I understand that saving money can be challenging, but it is an essential skill to have to secure your financial future. This is especially so if you want to build a healthy financial foundation; you must make saving a priority. In this article, we’ll provide some simple but effective strategies for putting more money aside each month.

    Why you should save

    There are many reasons why you should save money. Some of them include:

    • Building an emergency fund: An emergency fund is a set amount of money that is set aside to cover unexpected expenses, such as a car repair or medical bill. Having an emergency fund can provide peace of mind and protect against financial shocks.
    • Planning for large purchases: Saving can also help you plan for big expenses, such as a down payment on a house or a new car. By setting aside money over time, people can make these purchases without going into debt.
    • Retiring comfortably: Saving for retirement should be an important goal for you. By setting aside money regularly and investing it wisely, you can build a nest egg that will provide financial security in your golden years.
    • Leaving a financial legacy: You might save to leave a financial legacy for your loved ones. By building up your savings and investing in assets such as stocks and real estate, you can create a lasting source of wealth for your family.
    • Achieving financial independence: Finally, you can save to achieve financial independence. By living below your means and saving a significant portion of your income, you can eventually reach a point where you no longer have to rely on a traditional job to support yourself.

    Methods of saving a buck: Traditional and creative

    Traditional methods

    The traditional ways to save money and increase income include:

    1. Cutting expenses: One of the most common ways to save money is to cut expenses. This involves identifying areas where you are spending more money than necessary and finding ways to reduce or eliminate those expenses. For example, you could cut back on eating out, switch to a cheaper cell phone plan, or cancel subscription services that you do not use.
    2. Increasing income: Another way to save money is to increase your income. This can involve finding ways to earn more money from your current job, such as asking for a raise or taking on additional responsibilities. Alternatively, you could look for a new job that pays more, start a side hustle, or invest in assets that generate passive income.
    3. Creating a budget: Creating a budget is a crucial step in saving money and increasing income. A budget allows you to track your income and expenses, identify areas where you can cut back, and plan for future expenses. By creating and sticking to a budget, you can make sure that you are spending and saving your money in a way that aligns with your financial goals.

    The Creative

    There are many creative ways that people can save money, beyond the traditional methods of cutting expenses and increasing income. Some of these ways include:

    1. Using cashback apps and websites: Many cashback apps and websites offer rewards or cashback for making purchases at certain retailers or for completing certain tasks, such as answering surveys or watching videos. By using these apps and websites, you can save money on your everyday purchases and earn some extra cash at the same time.
    2. Swapping items instead of buying them: Instead of buying new items, consider swapping them with friends, family, or neighbours. For example, you could swap clothes, books, or DVDs instead of buying new ones. This can save you money and help you to build a stronger community.
    3. Using public transportation or carpooling: Instead of driving your own car, consider using public transportation or carpooling to save money on gas and car maintenance. This can be a great way to save money and reduce your carbon footprint at the same time.
    4. Growing your own food: Instead of buying produce from the grocery store, consider growing your own food. This can save you money on groceries and can provide you with fresh, healthy food.
    5. Using DIY solutions: Instead of hiring professionals for home repairs or other tasks, consider using DIY solutions to save money. For example, you could learn how to fix a leaky faucet or paint a room yourself instead of hiring a plumber or painter.
    6. Negotiating bills and fees: Many bills and fees, such as cell phone bills, cable bills, and credit card fees, are negotiable. By negotiating with your service providers, you may be able to reduce your monthly expenses and save money.
    7. Using coupons and discounts: Coupons and discounts can be a great way to save money on everyday purchases. Look for coupons and discounts in the newspaper, online, or in-store, and use them to save money on groceries, clothing, and other items.
    8. Selling unused items: Many people have items that they no longer need or use, such as clothes, books, or electronics. By selling these items, you can make some extra money and declutter your home at the same time.
    9. Renting out your space: If you have extra space in your home, such as a spare bedroom or a garage, you can rent it out to make some extra money. This can be a great way to save money on your own living expenses and earn some extra income.
    10. Sharing resources: Instead of buying things that you only use occasionally, such as tools, appliances, or sports equipment, consider sharing them with friends or neighbours. This can save you money and help you to build a stronger community.

    It doesn’t matter what method you choose to save or why you’re doing it. The key lesson is that as we get into the New Year, you should turn a new leaf. Saving money should be the first subtopic on that list. Save money as regularly as you can because you never know. One day, that money might save you. Good luck and Happy New Year!!

  • Borrowing like a Pro: Tips to help you secure loans

    Borrowing like a Pro: Tips to help you secure loans

    Have you ever been in a tight position? A very tight position? A very tight position where nobody is willing to lend you money yet you need it more than the oxygen that’s keeping you alive? Well, if you have then you wouldn’t be the first. Or the last. People and institutions, contrary to popular opinion, do not lend money. Instead, they lend trust in the form of loans. And as we know, trust is the foundation of business.

    When you default on your loan, whether given by an institution or an individual, you do not just fail to pay what you owe but you send beacons pointing to your lack of trust. And there is not enough trust to go around. This is why it becomes extremely difficult to be able to borrow again once you default. Rebuilding that trust once shattered is an expensive endeavour that few, if any, are willing to take.

    A pro borrower, therefore, takes in this information and comes to the understanding that loans are more than just monetary, they’re emotional. When pro borrowers take loans, they know that they are dealing with individuals. People have feelings and egos, and when they approve loans, they stick out their necks. Defaulting is akin to messing with their emotions. Humans hate it when people mess with their emotions.

    To be a pro borrower, therefore, means that you must understand what makes people tick. To do that:

    You must cultivate good relations with your lender(s)

    The relationship between a borrower and a lender can be either one-to-one or one-to-many. A one-to-one relationship refers to where a borrower, in this case, you, only deals with one lender for your loan needs while a one-to-many relationship is where you borrow from several lenders simultaneously. Both have their pros and cons. Sometimes, current prevailing economic conditions force people to lean towards a one-to-many kind of relationship.

    A pro borrower, however, understands that the type of relationship is insignificant. A pro borrower understands that a relationship between them and a lender must be underwritten by trust and loyalty. What drives a relationship is more important than what kind of relationship it is. A good relationship provides numerous advantages compared to a cold walk-in customer. For example, if you cultivate better relationships with your lenders, then you might have lenient repayment options compared to ones who don’t cultivate good relationships.

    It’s therefore crucial as a pro borrower, that you maintain good relations with your lender. It’s a great asset to have.

    You must have a repayment plan

    This applies to both loans given by either financial institutions of friends and family. As a pro borrower, you must have at least a basic understanding of financial management. Managing your finances successfully provides you with an opportunity to know how and when you’ll need to repay what you’ve borrowed.

    It’s even more crucial that you do this for informal loans, that is the ones provided by family. Financial institutions provide a framework on which a payment plan hangs that you must adhere, failure to which measures might be instituted against you. These payment plans act as a guardrail, preventing you from falling into default. Informal loans do not have recovery measures.

    However, one thing that family loans have is the far-reaching consequences of broken trust. When you do not repay your loans, you risk being the black sheep; an untouchable that no one wants to associate. Thus, before you borrow, ensure that you have a plan to repay it.

    Having a repayment plan, especially a written one ensures that you project yourself as one who understands themselves and thus knows what they’re doing.

    You must make payments on time

    Like Esau and his brother Jacob, paying your loans on time is the twin brother of having a repayment plan. The latter clutching the heels of the former. An elaborate payment plan is not worth the effort put into it if the plan does not translate into timely payments. A pro borrower understands that they do not just pay they pay on time.

    Making payments on time reinforces the idea that people can stick out their necks without losing them. It goes on to show that you are someone who can be trusted because paying loans is not just about money. On the face of it, yes, it’s about money. But if you dig a little deeper, you’ll realize that it’s about character. A good name opens doors that money can only dream of. Make sure you pay on time.

    You must only borrow what you need

    A sudden influx of cash is a wet dream for broke people. But, unless that influx (read loan) is to start or boost a business, buy a house or attend a pressing emergency, forget about it. Borrowing for non-issues like throwing a lavish party or going on a trip should be an economic no-no. I suggest that you find yourself a Jesuit and exorcize their demonic thoughts. Life is short, and you should do things that crinkle your face in unfathomable joy. But if those crinkles are going to land you in bad debts that might ruin you, forget them.

    Borrowing for consumption is expensive, emotionally and financially. This is further made worse by borrowing for intangible things i.e., things that you cannot see. This will entangle you in a cycle of debt from which extricating yourself might take a toll on your well-being.

    As a pro borrower, you must understand why you borrow. You must question yourself at length and, if you find out that you can do without some things and not severely jeopardize your life, then by all means stay away. You must have a keen understanding of your financial position and only change that position to borrow only if it’s necessary.

    A pro borrower, therefore, is one who not only understands themselves but also does so on a deeper level. To be a pro borrower, you must strive to build and foster trust in yourself. It means that you must be aware of where who you are and what you need intersect and how you can leverage that intersection to make your life meaningful when it comes to loans.

  • How to improve your credit rating in 2023

    Having a good credit score is important for a variety of reasons, including making it easier to obtain loans and credit cards, qualifying for lower interest rates, and potentially even increasing your employment prospects. In Kenya, credit scores are used by financial institutions and other lenders to assess an individual’s creditworthiness, so it is important to take steps to improve your credit score if you want to achieve your financial goals.

    Here are five ways you can increase your credit score in Kenya:

    Bill payment

    pay your bills on time: Payment history is one of the most important factors that goes into determining your credit score, so it is crucial to pay all of your bills on time. Late payments can have a negative impact on your credit score, so it is important to set up automatic payments or reminders to ensure that you don’t miss any deadlines.

    Credit utilization

    Keep your credit utilization low: Credit utilization refers to the amount of credit you are using relative to the amount of credit available to you. If you are using a high percentage of your available credit, it can have a negative impact on your credit score. To improve your credit utilization, you can either pay down your credit card balances or ask for an increase in your credit limit.

    Credit diversification

    Diversify your credit: Lenders like to see that you have a mix of different types of credit, such as credit cards, mortgages, and personal loans. Having a diverse credit mix can improve your credit score, as it demonstrates that you are able to handle different types of credit responsibly. Having a diverse credit mix can improve your credit score because it shows that you are able to manage different types of credit in a responsible manner. It also shows that you are able to handle different types of financial obligations and can be trusted with more credit. It’s important to note that diversifying your credit doesn’t necessarily mean you should go out and apply for every type of credit available. Instead, you should focus on building a strong credit history by using credit responsibly and paying your bills on time. Over time, you may naturally end up with a diverse credit mix as you take out different types of credit to meet your financial needs.

    Keeping track of credit report

    Check your credit report regularly: It is important to review your credit report regularly to ensure that the information it contains is accurate. If you find any errors or discrepancies, it is important to dispute them with the credit bureau as soon as possible.

    Avoiding too much credit

    Avoid applying for too much credit at once: Each time you apply for credit, it can have a negative impact on your credit score, as it adds a hard inquiry to your credit report. To avoid this, try to limit the number of credit applications you submit. If you do need to apply for credit, try to space out your applications over a longer period of time.

    What goes into determining your credit score in Kenya

    In Kenya, credit scores are used by financial institutions and other lenders to assess an individual’s creditworthiness and determine their ability to pay back loans and other debts. Credit scores are calculated using a variety of factors, including payment history, credit utilisation, length of credit history, types of credit used, and new credit. Here is a more detailed explanation of each factor:

    Payment history: Payment history is one of the most important factors that goes into determining your credit score. It refers to your track record of paying your bills on time. Late payments or missed payments can have a negative impact on your credit score, so it is important to make sure you pay all of your bills on time. This includes everything from credit card bills and mortgage payments to utility bills and car payments.

    Credit utilization: Credit utilization refers to the amount of credit you are using relative to the amount of credit available to you. If you are using a high percentage of your available credit, it can have a negative impact on your credit score. To improve your credit utilization, you can either pay down your credit card balances or ask for an increase in your credit limit. It is generally recommended to keep your credit utilization below 30%, as higher utilization can indicate to lenders that you may be overextending yourself financially.

    Length of credit history: The longer your credit history, the better. A longer credit history demonstrates to lenders that you have a track record of managing credit responsibly over a longer period of time. It also shows that you have experience handling different types of credit and can be trusted with more credit.

    Types of credit used: Lenders like to see that you have a mix of different types of credit, such as credit cards, mortgages, and personal loans. Having a diverse credit mix can improve your credit score, as it demonstrates that you are able to handle different types of credit responsibly.

    New credit: Each time you apply for credit, it can have a negative impact on your credit score, as it adds a hard inquiry to your credit report. To avoid this, try to limit the number of credit applications you submit. If you do need to apply for credit, try to space out your applications over a longer period of time.

    In conclusion, your credit score in Kenya is determined by a variety of factors, including payment history, credit utilization, length of credit history, types of credit used, and new credit. By paying your bills on time, keeping your credit utilization low, building a long credit history, diversifying your credit, and avoiding applying for too much credit at once, you can take steps to improve your credit score and achieve your financial goals. It is important to remember that building and maintaining a good credit score is a long-term process, so it is important to be patient and consistent in your efforts to improve your credit score.

  • Hela Pesa Survival Guide: How to stop wasteful spending

    Wasteful spending can be a major drain on your finances, leaving you with less money to save or spend on things that truly matter. It’s easy to rationalize unnecessary purchases, telling ourselves that we deserve to treat ourselves or that we need a certain item to be happy. However, this kind of thinking can quickly lead to financial trouble.

    To stop wasteful spending, it’s important to first become aware of your spending habits and identify areas where you tend to overspend. This may require tracking your expenses for a month or two to get a better sense of where your money is going. Once you have a better understanding of your spending patterns, you can start to make changes and develop healthier habits.

    Why you are overspending

    There are several reasons why you tend to spend more than you need.  They include:

    • The influence of advertising and marketing: Companies spend billions of dollars each year on advertising and marketing to persuade people to buy their products, even if they do not necessarily need them. This constant exposure to advertisements can lead people to believe that they need certain products and can convince them to make unnecessary purchases.
    • A desire for instant gratification: People often have a desire for instant gratification and may be willing to spend money to satisfy their immediate needs and desires. This can lead to overspending on things like food, clothing, and entertainment.
    • Peer pressure: People may also be influenced by their peers and social circles to spend more than they need. For example, people may feel pressure to keep up with the latest trends or to maintain a certain lifestyle, which can lead to excessive spending.
    • Difficulty managing money: People may have difficulty managing their money and may not have a clear understanding of their financial situation. This can lead to overspending, as people may not be aware of how much they are spending or may not have a plan in place to manage their finances effectively.
    • Impulse buying:  Some people may have difficulty controlling their impulses, which can lead them to make impulsive purchases without thinking about the long-term consequences. This can be particularly true for people who have underlying conditions such as attention deficit hyperactivity disorder (ADHD), which can affect impulse control. Many people tend to make impulsive buying decisions without thinking through the consequences of their actions. This can lead to overspending on things that are not necessary or useful.
    • Lack of budgeting and planning: People who do not have a budget or a financial plan in place are more likely to overspend, as they do not have clear guidelines for how to manage their money. This can lead to excessive spending on things that are not necessary or that do not align with their long-term financial goals.
    • Emotional regulation: For some people, spending money can be a way to regulate their emotions. For example, if someone is feeling down, they may engage in retail therapy, buying things that make them feel happy or distracted. However, this can be a short-term solution that only leads to wasteful spending.
    • The pleasure or reward response: Spending money can trigger the release of chemicals in the brain, such as dopamine, which can produce a feeling of pleasure or reward. This can make spending money feel enjoyable and can lead people to engage in wasteful spending to seek out this pleasurable sensation.

    The things that might be wasting your money

    Several expenses commonly waste money that you might not even be aware of. Some of these expenses include:

    1. Late fees: Late fees can be a significant source of wasted money, especially for people who frequently miss payment deadlines. To avoid late fees, make sure to pay your bills on time and set reminders to help you stay on top of your payments.
    2. Interest on credit card balances: Credit card interest can add up quickly and can be a significant source of wasted money. To avoid paying interest on your credit card balances, make sure to pay off your balances in full each month and avoid carrying a balance from one month to the next.
    3. ATM fees: ATM fees can add up quickly, especially if you use ATMs that are not part of your bank’s network. To avoid ATM fees, make sure to use ATMs that are part of your bank’s network or that do not charge fees.
    4. Subscription services that you don’t use: Many people have subscription services that they do not use, such as gym memberships, streaming services, or subscription boxes. To avoid wasting money on these services, make sure to cancel any subscriptions that you do not use regularly.
    5. Unnecessary purchases: People often make unnecessary purchases, such as buying things they do not need or buying things they can get for free elsewhere. To avoid wasting money on unnecessary purchases, make sure to think carefully before making any buying decisions and to consider whether you really need something before you buy it.

    Why wasteful spending might be bad for your financial health

    The long-term impacts of wasteful spending can be significant, both financially and in other areas of life. Some of the potential impacts of wasteful spending may include:

    • Financial strain: Wasting money on unnecessary expenses can put a strain on a person’s budget, leaving them with less money to cover their essential expenses or save for the future. This can lead to financial insecurity and a lack of stability.
    • Debt: If a person engages in excessive or reckless spending, they may end up accumulating a significant amount of debt, which can be difficult to repay and can have negative consequences for their credit score and overall financial health.
    • Stress and anxiety: Wasting money can be a source of stress and anxiety, particularly if it leads to financial difficulties or creates tension in a person’s relationships. This can harm a person’s mental health and well-being.
    • Lost opportunities: Wasting money on non-essential expenses can mean that a person has less money available to invest in things that could improve their quality of life, such as education, travel, or personal development. This can limit their opportunities and hinder their ability to achieve their goals.

    How to stop wasteful spending on its track

    1. Create a budget: The first step to avoiding overspending is to create a budget that outlines your income and expenses. This will help you to understand how much money you have available and where you can cut back.
    2. Set financial goals: Having clear financial goals will help you to focus on what is most important to you and to avoid overspending on things that do not align with your priorities.
    3. Stick to your budget: Once you have created a budget, it is important to stick to it as closely as possible. This means avoiding unnecessary purchases and making sure that you do not spend more than you have allocated for each expense category.
    4. Track your spending: Regularly tracking your spending will help you to stay on top of your finances and to identify any areas where you may be overspending. You can use a financial app or software to help you track your expenses and make sure that you are staying on budget.
    5. Avoid impulse buying: Impulse buying is a common cause of overspending, so it is important to avoid making impulsive purchasing decisions. Take the time to think about whether you really need something before you buy it, and consider whether you can find a better deal or save money in other ways.
    6. Use cash instead of credit cards: Using cash instead of credit cards can help you to avoid overspending as it is easier to see how much money you are spending in real time. Plus, when you use cash, you are less likely to make impulsive purchases as you are physically handing over money.

    You must understand, however, that what I’ve written here is worth exactly less than nothing if you do not put your back into it. You must not only be willing to accept that you might be overspending but also take the necessary steps to consciously avoid overspending.

  • The role of the employer in facilitating check-off loans

    In Kenya, check-off loans, also known as salary-deduction loans, are a common form of credit offered by employers to their employees. These loans are deducted directly from the employee’s salary, making them a convenient way for employees to access credit. The employer plays a key role in facilitating check-off loans for their employees and is subject to certain legal requirements and obligations under Kenyan law. In this report, we will explore the role of an employer in facilitating check-off loans in Kenya in more detail.

    Legal Framework for Check-off Loans in Kenya

    The legal framework for check-off loans in Kenya is set out in the Employment Act of 2007 and the Credit Reference Bureaus Act of 2007. These laws establish the legal framework for check-off loans in the country and set out the rights and responsibilities of employers and employees in relation to check-off loans. Under these laws, employers are allowed to facilitate check-off loans for their employees but are subject to certain requirements and obligations.

    Employment Act of 2007: The Employment Act of 2007 sets out the rights and obligations of employers and employees in relation to check-off loans. According to the Act, employers are required to provide employees with clear and accurate information about the terms of the loan, including the interest rate, repayment period, and any fees or charges. Employers are also required to ensure that the terms of the loan are fair and reasonable and that the employee is able to afford the loan based on their salary.

    The Regulations on Employment and Remuneration, 2010 further specify that the maximum amount that can be deducted from an employee’s salary for a check-off loan is 10% of the employee’s gross salary. This means that, for example, if an employee has a gross salary of KES 50,000 per month, the maximum amount that can be deducted for a check-off loan is KES 5,000.

    Credit Reference Bureaus Act of 2007: The Credit Reference Bureaus Act of 2007 establishes the regulatory framework for credit reference bureaus in Kenya. Under the Act, credit reference bureaus are required to maintain accurate and up-to-date information about the creditworthiness of individuals and businesses. Employers are required to report any check-off loans that they facilitate to the credit reference bureaus so that the information can be included in the borrower’s credit report.

    The Role of the Employer in Facilitating Check-off Loans in Kenya

    Under Kenyan law, the role of an employer in facilitating check-off loans and their potential obligations can vary depending on the specific terms and conditions of the loan. However, there are some general principles that apply to the employer’s role in facilitating check-off loans:

    Facilitating the loan process: An employer may facilitate the loan process by offering check-off loans as an employee benefit, providing information and assistance to employees who are interested in taking out a check-off loan, and collecting loan repayments from the employee’s salary. The employer may also be responsible for communicating the terms and conditions of the loan to the employee and ensuring that the employee understands their obligations under the loan agreement.

    Intermediary: As mentioned above, the employer serves as the intermediary between the employee and the lender. The employer is responsible for collecting the loan payments from the employee’s salary and forwarding them to the lender.

    credit Check: In some cases, the employer may be responsible for conducting a credit check on the employee before approving the loan. This can help the employer to determine whether the employee is a good candidate for a check-off loan and can also help to protect the employer from potential default risk.

    Counseling: The employer may also play a role in providing counseling or financial education to employees who are considering taking out a check-off loan. This can help employees to understand the terms of the loan and make informed decisions about whether a check-off loan is the right financial option for them.

    Compliance: The employer is also responsible for ensuring compliance with the Employment Act of 2007 and the Credit Reference Bureaus Act of 2007, as well as any other applicable laws or regulations related to check-off loans. This includes providing employees with clear and accurate information about the terms of the loan, ensuring that the terms of the loan are fair and reasonable, and reporting the loan to the credit reference bureaus.

    Obligations

    • Protecting employee rights: An employer has a duty to protect the rights of its employees, including their financial rights. This means that the employer should ensure that the terms and conditions of the check-off loan are fair and reasonable and that the loan is not being used to exploit the employee’s financial situation.
    • Complying with employment laws: An employer has a legal obligation to comply with employment laws, including laws relating to salary deductions. This means that the employer must ensure that the check-off loan repayments are deducted from the employee’s salary in accordance with the applicable laws and regulations.
    • Ensuring confidentiality: An employer has a duty to protect the confidentiality of its employee’s personal and financial information. This means that the employer should not disclose the details of the employee’s check-off loan or the loan repayments to third parties without the employee’s consent unless required to do so by law.

    Overall, the role of an employer in facilitating check-off loans and their potential obligations can vary depending on the specific terms and conditions of the loan. It is important for employers to carefully review the terms and conditions of check-off loans and ensure that they are complying with all relevant laws and regulations, in order to protect the rights of their employees and avoid potential legal liabilities.

    Risks for Employers in Facilitating Check-off Loans in Kenya

    There are also risks for employers in facilitating check-off loans for their employees in Kenya:

    Default Risk: If an employee default on their check-off loan, the employer may be held liable for the unpaid balance. This can be especially risky for employers who have a large number of employees taking out check-off loans, as the potential default

  • Potential risks and consequences of defaulting on a loan in Kenya

    Defaulting on a loan payment can have significant consequences for both the borrower and the lender. It can lead to financial problems for the borrower, damage their credit score, and potentially result in legal action being taken against them. In this report, we will explore the risks and consequences of defaulting on a loan payment in greater detail.

    What is Defaulting on a Loan Payment?

    Defaulting on a loan payment occurs when a borrower fails to make their required monthly payment on a loan. This can happen for a variety of reasons, including financial hardship, unemployment, or simply forgetting to make the payment. Depending on the terms of the loan agreement, a borrower may be considered in default if they miss just one payment, or if they are consistently late with their payments.

    Risks of Defaulting on a Loan Payment

    There are several risks associated with defaulting on a loan payment.

    1. Financial Consequences: Defaulting on a loan can lead to financial problems for the borrower. If the borrower is unable to make the required payments, they may end up owing more money in the long run due to late fees and interest charges. This can make it difficult for the borrower to get out of debt and can lead to financial hardship.
    2. Damage to credit score: Defaulting on a check-off loan can have a significant negative impact on the borrower’s credit score. Credit scores are used by lenders to assess the risk of lending to a borrower, and a low credit score can indicate to lenders that the borrower is a high-risk borrower who may be more likely to default on their loans. As a result, defaulting on a check-off loan can result in a significant decrease in the borrower’s credit score, which may make it more difficult for them to obtain credit in the future.
    1. Loss of employment: In some cases, defaulting on a check-off loan may result in the borrower losing their job. Many employers offer check-off loans as a benefit to their employees and may require the borrower to sign an agreement stating that they will repay the loan as agreed. If the borrower defaults on the loan, the employer may consider this to be a breach of the agreement and may choose to terminate the borrower’s employment. This can be particularly risky if the borrower is already struggling to make the loan repayments, as losing their job may make it even more difficult to repay the loan.
    1. legal action: If the borrower defaults on a check-off loan, the lender may take legal action to recover the debt. This could involve filing a lawsuit against the borrower, seeking a court order to garnish the borrower’s wages or seize their assets, or other legal remedies. Legal action can be costly and time-consuming and may result in the borrower incurring additional fees and costs associated with the legal process.
    1. Repossession: If the borrower has used collateral as security for the loan, defaulting on the loan may result in the lender repossessing the collateral. This could be a home, a vehicle, or other personal property. Repossession can be a stressful and difficult experience for the borrower and may result in the borrower losing a valuable asset.
    1. Stress and anxiety: Defaulting on a check-off loan can be a stressful and anxiety-provoking experience for the borrower. It can lead to financial strain and may cause problems in personal relationships and other areas of the borrower’s life. The borrower may experience feelings of shame, guilt, or embarrassment as a result of defaulting on the loan, which can have negative impacts on their mental health and well-being.
    1. Difficulty obtaining credit in the future: Defaulting on a check-off loan can make it more difficult for the borrower to obtain credit in the future, as lenders may view the borrower as a high-risk borrower. This can limit the borrower’s options for borrowing and may make it more difficult for them to finance important purchases or investments. It may also result in the borrower having to pay higher interest rates on future loans, as lenders may consider them to be higher-risk borrowers.
    1. Negative impact on personal relationships: Defaulting on a check-off loan may also have negative impacts on the borrower’s personal relationships. The borrower may experience conflicts with their employer, family, or friends as a result of the default, and may face pressure or criticism from these individuals. The borrower may also feel isolated or unsupported if they are unable to discuss their financial situation with others, which can further exacerbate the stress and anxiety associated with defaulting on the loan.

    The consequences of defaulting on a loan payment can be severe and long-lasting.

    1. Difficulty Obtaining Future Loans: Defaulting on a loan can make it difficult for the borrower to obtain future loans or credit cards. Lenders may be hesitant to lend to someone who has a history of not making their payments on time and may require a higher interest rate as a result.
    2. Damage to Credit Score: As mentioned above, defaulting on a loan can damage the borrower’s credit score. This can make it more difficult for the borrower to obtain future loans or credit cards and may result in higher interest rates on future borrowing.
    3. Legal Action: As mentioned above, lenders may take legal action against borrowers who default on their loans. This can result in a judgment against the borrower, which could have negative consequences such as wage garnishment or the seizure of assets.
    4. Emotional Stress: Defaulting on a loan can also be emotionally stressful for the borrower. The borrower may feel overwhelmed by the financial problems that have resulted from defaulting on the loan and may feel a sense of shame or embarrassment about their situation.

    Overall, defaulting on a check-off loan can have serious consequences for the borrower, including damage to their credit score, legal action, repossession, financial and personal stress, and difficulty obtaining credit in the future. It is important for borrowers to carefully consider the risks and consequences of defaulting on a check-off loan before taking one out, and to make every effort to repay the loan as agreed.

  • Types of check-off loans

    In Kenya, check-off loans are a type of loan provided by an employer to an employee, with the loan payments being deducted directly from the employee’s salary. The employer acts as a facilitator of the loan, as they are responsible for deducting the loan payments from the employee’s salary and forwarding the payments to the lender. Check-off loans can be a convenient way for employees to access credit, as the loan payments are automatically deducted from their salary, making it easier for them to manage their finances.

    There are several different types of check-off loans that may be available in Kenya, including personal loans, car loans, and mortgage loans. Personal loans are unsecured loans that can be used for a variety of purposes, such as paying off debt, making home improvements, or financing a vacation. Car loans are used to finance the purchase of a new or used vehicle and may be offered by the car dealership or through a third-party lender. Mortgage loans are used to finance the purchase of a home, and may be offered by a bank or other financial institution.

    The specific terms and conditions of check-off loans vary depending on the type of loan and the lender. Some common terms and conditions include:

    Personal loans: Personal check-off loans may have loan amounts ranging from KES 10,000 to KES 2 million, with repayment periods of up to 48 months. Interest rates may range from 12% to 24%, and fees and charges may include an origination fee, a processing fee, and a late payment fee.

    Car loans: Car check-off loans may have loan amounts ranging from KES 200,000 to KES 4 million, with repayment periods of up to 72 months. Interest rates may range from 8% to 18%, and fees and charges may include a processing fee, a disbursement fee, and a late payment fee.

    Mortgage loans: Mortgage check-off loans may have loan amounts ranging from KES 1 million to KES 50 million, with repayment periods of up to 20 years. Interest rates may range from 8% to 14%, and fees and charges may include a processing fee, a legal fee, and a valuation fee.

    Education loans: These loans are used to finance the cost of education, such as tuition fees and living expenses. Education check-off loans in Kenya may have loan amounts ranging from KES 50,000 to KES 500,000, with repayment periods ranging from 5 to 15 years.

    It is important for both employers and employees to carefully review the specific terms and conditions of a check-off loan before agreeing to it. Employers should ensure that the terms of the loan are fair and reasonable and that the employee fully understands the terms of the loan and any potential consequences of defaulting on the loan.

    Employees should be aware of the total cost of the loan, including any fees or charges, and make sure that they can afford the loan payments before agreeing to the loan. In addition, it is important for employers to ensure that they are complying with all relevant laws and regulations in relation to check-off loans in Kenya. This includes obtaining any necessary licenses or permits and ensuring that the loan is properly documented and recorded.

    Eligibility criteria for check-off loans

    In Kenya, check-off loans are a type of loan offered by an employer to its employees, where the loan repayments are deducted directly from the employee’s salary. These loans are often offered as an employee benefit and are usually unsecured, meaning they do not require collateral.

    Eligibility for check-off loans in Kenya may vary depending on the lender and the specific terms and conditions of the loan. However, there are generally some common criteria that borrowers must meet in order to be eligible for a check-off loan.

    • Employment status: In order to be eligible for a check-off loan, the borrower must be an employee of the company offering the loan. The borrower may need to provide proof of employment, such as a letter of employment or pay stubs. This requirement ensures that the lender has a source of repayment for the loan, as the loan repayments are deducted directly from the borrower’s salary.
    • Length of employment: Some lenders may require borrowers to have been employed with the company for a certain period of time before they are eligible for a check-off loan. This requirement may vary depending on the lender and the specific loan terms, but is typically meant to ensure that the borrower has a stable job and is likely to continue to receive a salary for the duration of the loan.
    • Credit score: Some lenders may require borrowers to have a good credit score in order to be eligible for a check-off loan. A good credit score may be considered to be above 650, depending on the lender. This requirement is meant to ensure that the borrower has a history of responsible borrowing and is likely to repay the loan as agreed. Borrowers with a poor credit score may still be eligible for a check-off loan but may be required to pay a higher interest rate or provide collateral as security for the loan.
    • Income: Lenders may also consider the borrower’s income when determining eligibility for a check-off loan. Borrowers may need to demonstrate that they have a stable income and are able to afford the loan repayments. This requirement is meant to ensure that the borrower is able to meet their financial obligations and is not taking on more debt than they can handle.
    • Age: Some lenders may have age requirements for check-off loans, with borrowers typically needing to be over 18 years of age. This requirement is meant to ensure that the borrower is of legal age and able to enter into a binding contract for a loan.

    In addition to these common eligibility criteria, borrowers may also need to meet any additional requirements set by the lender, such as providing proof of identity, proof of residence, or other documentation. It is important for borrowers to carefully review the eligibility criteria for check-off loans before applying, in order to understand the requirements and ensure that they meet them. Borrowers who do not meet the eligibility criteria may be rejected for a check-off loan or may need to explore other options for borrowing.

  • Simple financial tips to keep in mind this festive season

    Simple financial tips to keep in mind this festive season

    Personal, according to the Advanced English Dictionary, means something that affects or concerns a particular person in their private life and personality. Since the topic of this blog involves the word personal and finance it thus means that when it comes to the management of personal finance, you get the last word. What you do with your money is your business, and thus out of the privy of the general public since personal finance is, well, personal.

    But since the moment humans learned to communicate through language, advice has been more or less bundled into that communication. Thus, although personal finance is, well, personal, I could tell you a thing or two that I feel you could adopt to ensure that you manage your finances to provide maximum utility.

    Skills You Need talks of personal finance as involving being aware of your position financially and then undertaking steps to ensure that you have meaningful outcomes that you can be proud of in the end.

    Some things that you could do to manage your finances better might include:

    Be aware of the limits of your income

    Money is a resource. And like all resources used in satiating limitless and sometimes needless human wants, it is scarce, for scarcity is what confers value and thus utility. However, this last one is highly subjective. Thus, this scarcity dictates that money should be managed prudently and effectively to provide the highest utility values.

    Since they pay you in currency, which is money, it means that what they pay you is probably not enough to cover all the exposed parts of your financial anatomy. This, therefore, means that you must know how far you can stretch your income before it snaps and hit you right between the eyes in the form of debt. To avoid the embarrassment of debt, you must be able to prudently manage your money, ensuring that you exercise financial brevity for brevity is the soul of wit. Using your money correctly will make the world see you as a smart person indeed.

    Save whenever and wherever

    A lot of literature, both online and offline extolls the virtues of saving. Saving refers to the act (you must do it, not just think about it) of setting aside some portion of your income to cover unprecedented outcomes, mostly negative, in the future or to accomplish a given task in the future. On the battle of whether you should save before or after, I do not know enough to actually form an opinion. Do as you see fit.

    Now, saving has been difficult even in the best of times, and now with the advent of Covid-19, the level of difficulty is far above the reach of most ordinary folks. This smacks true for us in Kenya, where inflation is in a hurry to reach its teens while wages, not in a hurry to catch up, are sticky flowing with the grace of bitumen. It barely moves and if it does you never see or feel it.

    Evil, as Stephen King says, has a way of popping up full-blown and ready to go. Saving, which is the direct opposite of evil (that title goes to wastage), takes time, slowly dragging itself into use. But like all things good, the pain usually comes before the gain. This means that no matter what happens, you must strive to save.

    But like all things in life, you cannot plan for the future and sometimes misery brings along its distant relatives into your life to keep it company. Sickness and other crazies can wipe out your savings no matter how prudently you save. If this happens to you, head over to our website or download our app for a quick salary advance to sort yourself out in case your savings run out. We got your back.

    Try to invest

    Investment, an offshoot of savings, is the act of purchasing assets, which might be in the form of land, for example, to earn a return on the money you invested. The sole aim of investing, as opposed to saving, is to increase an individual’s wealth.

    To better manage your finances, you are better off if you learn to invest prudently. One of my favorite lines in investing is by Warren Buffet, the CEO of Berkshire Hathaway. He said, “I do not look for six-foot poles to jump over, but rather one-foot sticks to walk over”. This means that it doesn’t have to be complex. But like all things good, investment can be difficult and mind-boggling at first. Dogged determination can get you far, and might go a long way in helping you dodge the glaring blunders that novice investors make. Time spent on the internet, or on books will go a long way in helping you figure out the best investment vehicle.

    However, if it’s all a conundrum to you, you can look for brokers and do your investments through them for they might be well versed in these matters. Remember, the goal is to invest.

    Have an Extra Income

    This might not be traditional in the financial management camp, but extra money has never hurt anyone. My thinking might be convoluted, but sometimes money can be so tight that no matter how prudently you manage it, it just never cuts it.

    To loop around this, I think you should look for extra income if you can get it, that is. A side hustle will give you the peace of mind to better manage your affairs, for that too is the purpose of financial management. This side hustle, be it a business or a skill that you’re good at, will provide that extra oomph you need to live comfortably.

    If you need funds to start your side hustle, you could head over to our website or download our app to get funding to unlock your potential.

  • Check Off Loan

    Check Off Loan

    What is a check-off loan?

    A check off loan is a type of loan provided by an employer to an employee, with the loan payments being deducted directly from the employee’s salary. The employer acts as a facilitator of the loan, as they are responsible for deducting the loan payments from the employee’s salary and forwarding the payments to the lender. This type of loan can be convenient for employees, as the loan payments are automatically deducted from their salary, making it easier for them to manage their finances.

    Types of check-off loans

    Several different types of check-off loans may be offered by employers, including personal loans, car loans, and mortgage loans. In some cases, employers may offer check-off loans as a benefit to their employees, while in other cases, the loans may be offered through a third-party lender.

    Check-off loans can be an attractive option for both employees and employers, as they offer several benefits. For employees, check-off loans can provide access to credit that may not be available elsewhere, and the automatic deduction of loan payments from their salary can make it easier to manage their finances.

    However, both employers and employees need to be aware of their rights and responsibilities in relation to check-off loans. In many countries, there are specific laws and regulations that govern this type of loan, and it is important for employers to ensure that they are compliant with these laws. This may include obtaining any necessary licenses or permits, and ensuring that the terms of the loan are clearly communicated to the employee.

    There are also potential drawbacks to check-off loans for both employees and employers. For employees, the main disadvantage is that their loan payments are deducted directly from their salary, which can affect their cash flow and make it more difficult to budget. Additionally, employees may not fully understand the terms of their loans and may end up paying more in interest and fees than they anticipated.

    For employers, offering check-off loans can be a time-consuming and administratively intensive process. Employers must negotiate the terms of the loans with the financial institution, manage the payroll deduction system, and ensure that employees are making timely payments. Additionally, there is the risk that some employees may default on their loans, which can create financial problems for the employer

    How check-off loans work

    To obtain a check-off loan, employees typically need to complete a loan application and provide proof of employment and income. The employer then negotiates the loan terms on behalf of the employee with a financial institution, such as a bank or a credit union. Once the loan has been approved, the employer sets up a payroll deduction system to automatically deduct the loan payments from the employee’s salary.

    Check-off loans in Kenya can be used for a variety of purposes, including to cover unexpected expenses, to finance a large purchase, or to consolidate debt. The terms of these loans vary, but they typically have a fixed interest rate and a fixed repayment period.

    It is important for both employees and employers to fully understand the terms of a check-off loan before agreeing to it. Employees should carefully review the loan agreement to ensure that they understand the interest rate, fees, and repayment terms, and should ask questions if anything is unclear. Employers should also ensure that they are able to manage the payroll deduction system effectively and that they are able to handle any potential default issues that may arise.

    Advantages of check-off loan

    There are several advantages to check-off loans for both the employer and the employee. One advantage is the convenience factor. For the employer, offering check-off loans can be a cost-effective way to provide financial assistance to employees without the need for a dedicated HR or finance team to manage the process. For the employee, check-off loans can provide a quick and easy way to access credit, without the need to go through a traditional loan application process.

    Another advantage of check-off loans is that they often have lower interest rates than traditional loans, as they are considered to be low-risk for the lender. This can make check-off loans a more affordable option for employees who may not have access to other forms of credit, or who may have poor credit scores.

    In addition, check-off loans can be a useful financial tool for employees who need to borrow a small amount of money for a specific purpose, such as paying for an emergency expense or making a small purchase. These loans can provide employees with the financial flexibility they need to handle unexpected expenses or make necessary purchases, without the need to rely on credit cards or other forms of high-interest credit.

    Overall, check-off loans can be a convenient and affordable option for employees who need to borrow a small amount of money and can provide valuable financial assistance in times of need.

    Disadvantages of check-off loans

    One disadvantage of check-off loans is that the loan repayments are deducted directly from the employee’s salary, which can cause financial strain if the employee is already living paycheck to paycheck. In addition, if the employee loses their job or experiences a reduction in salary, they may struggle to make the loan repayments, which could lead to default and damage their credit score.

    Another disadvantage of check-off loans is that they may not be suitable for larger purchases or investments, as the loan amounts may be limited. This can be a problem for employees who need to borrow a larger sum of money for a specific purpose, such as a down payment on a house or a business investment.

    In addition, check-off loans may not offer the same level of flexibility as traditional loans. For example, the loan terms and repayment schedule may be fixed, meaning that the employee may not be able to make additional payments or pay off the loan early without incurring additional fees.

    Finally, check-off loans may not be available to all employees, depending on the employer’s policies and the employee’s job status. This can limit the access that employees have to this type of financial assistance, and may make it more difficult for them to obtain credit in the event that they need it.

    Conclusion

    Overall, while check-off loans can be a convenient and affordable option for employees who need to borrow a small amount of money, they also have several disadvantages that should be carefully considered before taking one out.

  • 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

  • The 80/20 rule you can use to simplify your budgeting process

    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?

  • Five Things To Keep In Mind About Personal Finance

    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.

  • Tactics to Saving Fuel this Festive Season

    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.

  • What you need to know about Personal loan borrowing

    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.