Private-lending firm AVL Capital with Flexus Systems have unveiled a mobile-phone loan service that works across all service providers in the country. Dubbed Pesa na Pesa, the SMS-based service requires registered users to send an SMS to a short code, 3105, with desired amount and once approved, borrowers can withdraw from an authorized agent within an hour. Users must be subscribed to a mobile money transfer platform to benefit from the service.The service charges a 7-10% interest.
AVLC Group Managing Director Andrew Kanyutu said the service seeks to be more inclusive by giving borrowers several collateral options.
What you need to be approved:
- Shares listed on the NSE can be an asset to access the money you need.
- Guarantees from Chamas(Investment clubs) or savings from Saccos can be a security.
- For salaried people, the company will verify employment with guarantees from their employer. and background checks will be performed.
- Verifiable repayment history from a recognized lending institution.
- Regular cash flow from one’s business.
The facility has a seven day repayment period, although early payments are accepted at no extra charge.
“We try to establish a better customer relationship so if someone is unable to pay we can find out why and try to restructure with the borrower,” Kanyutu explained.
For now prospect members can register with AVLC by contacting the company, as it finalizes physical registration locations.
“Chase has the platform for bulk payments so we’ve partnered with them because it requires a lot of heavy capital investment. The money is still ours but we are riding on their systems,” Kanyutu said.
AVLC draws its funds from private equity and is looking to work with other financial institutions to source more capital for lending.
The company plans to roll out the service to all East African countries by the fourth quarter of this year.
Earlier this month Airtel Kenya launched its mobile phone money transfer service for its subscribers to get loans ranging from Sh100 to Sh10,000 through the Faulu Kenya.
One of Kenya’s biggest business challenge is capital. With access to more funding with better borrowing options, more domestic businesses can thrive therefore, reducing our dependence on foreign investments.