Consolidation of microloans from different Mpesa loan applications in Kenya

When you visit the Google app store, you will find several apps that offer instant Mpesa loans in Kenya. Surprisingly, a casual search might miss the most successful, like Branch and Tala, who have made loans to the tune of billions. Each instant loan application will offer you a small amount of money that you can pay back in a few weeks, a month or two. This is perfect for small emergencies when you only need a small amount of money. However, if you want a larger loan or a longer term payment period, they won’t help much. Consider a case where you need an amount like 30,000. If each app provides only 2000, you need to download more than 15 apps to get what you need. Also, how will you pay back the amount within the few weeks you are given?

Using online resources, you can combine loans from different applications to get one big loan and also extend the repayment period by up to a year. This will give you the opportunity to solve your big problem and make affordable monthly payments while avoiding the pitfall of listing on CRB, which many have fallen into.

Have you come across a platform called The Online Sacco? From the name, you can guess that it is a loan service that operates online. Unlike instant loan apps, the platform offers various services including advertising and networking opportunities for people doing business. In this case, we will only focus on the loan service. Like the apps, Sacco is free to join and members start with small loans of Ksh1000. When a member makes payments on time and takes out more loans, the limit grows. Loans are released within 24 hours of application.

The platform differs from Mpesa’s instant loan apps as its loans are based on a digital token called Toser. The Toser is like a share of the company with a value calculated in Kenyan shillings. For example, if a Toser is worth Ksh100, you will get 10 Toser when you pay Ksh1000. Sacco Online members can buy and sell Tosers with each other.

When you want to apply for a loan, the amount of Tosers you have in your account is considered. It is then multiplied by three to arrive at the amount of the loan that will be granted to you. So, if you have Tosers worth Ksh3000, you qualify for a loan worth Ksh9000. A higher number of Tosers means a higher loan amount.

Consolidation of microloans from different instant loan applications

You still have to download the multiple loan applications and take out a micro loan from each one before consolidating it into one big loan. When you get the money, use it to buy Tosers at the Sacco online before applying for a large loan with a flexible repayment period. For example, if you get Ksh2000 from 10 apps, you will end up with Ksh20,000 in total. Buying Tosers with this will result in a loan of Ksh60,000 from Sacco online. After repaying loans, interest, and application fees, you’ll have more than $30,000 left.

Loan consolidation has many advantages for you. The main one is that you have the money you needed to solve your problem. You’ll also build your loan limits with instant loan apps, as they generally increase limits based on timely loan repayment. You will also have made an investment in the process that you can recover once you finish paying the loan. In addition, the Tosers you purchased may have a higher value when you pay off your loan and therefore cover the additional cost incurred in the consolidation process. For example, in six to twelve months, the Tosers you bought for Ksh20,000 could be worth Ksh30,000.

Consolidation errors to avoid

It’s a pretty straightforward process, but if you’re not careful, little hiccups can ruin your perfect plan. First, you need to make sure you have the Sacco account online before you get loans from other microlenders. Sacco online membership is by invitation only, so work on the invitation first.

Another important thing to note is that Sacco loans online are sent through prepaid debit cards. You will be able to buy Tosers through Mpesa directly, but without the card, you will not get a loan from Sacco online. Cards are issued free of charge by various institutions, including the family bank. Therefore, you should get one before you start the consolidation process.

Finally, make sure you pay instant loan applications immediately after getting money from Sacco online. If you delay, you could use it and end up with two loans that you can’t adequately repay. Remember, the figures quoted in this article are just examples.

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