Consolidation of microloans from different Mpesa loan applications in Kenya

Consolidation of microloans from different Mpesa loan applications in Kenya

When you visit the Google app store, you will find several apps offering instant Mpesa loans in Kenya. Surprisingly, a casual search might miss the most successful like Branch and Tala, which have given out billions in loans. Any instant loan application will offer you a small amount of money that you can repay in a few weeks, a month or two. This is perfect for small emergencies when you only need a small amount of cash. However, if you want a larger loan or a longer repayment period, they won’t be of much use. Consider a case where you need an amount like 30,000. If each app only provides 2,000, you have to download over 15 apps to get what you need. Also, how are you going to pay it back 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 one year. This will enable you to solve your big problem and make affordable monthly payments, avoiding the CRB listing trap that many have fallen into.

Have you come across a platform called The Online Sacco? You can guess from the name that this is an online loan service. Unlike instant loan apps, the platform offers a variety of services including advertising and networking opportunities for people doing business. In this case, we will focus only on servicing the loan. Just like the apps, the Sacco is free to join and starts members with small loans from Ksh1000. As a member makes on-time repayments and takes out more loans, the limit increases. Loans are released within 24 hours of application.

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

When you want to apply for a loan, the number of Tosers you have in your account is taken into account. It is then multiplied by three to get the loan amount that will be given to you. Therefore, if you have Tosers worth Ksh3000, you qualify for a loan worth Ksh9000. More number of Tosers means higher loan amount.

Consolidation of microloans from different applications for instant loans

You still need to download multiple loan applications and get a microloan from each before consolidating it into one large loan. When you get the money, use it to buy Tosers in Online Sacco before applying for a big loan with a flexible repayment period. For example, if you get Ksh2000 from 10 applications, you will get a total of Ksh20,000. Buying Tosers with this will turn into a Ksh60,000 loan from the online Sacco. After paying back the loans, interest and application fees, you’ll be left with over 30,000.

Consolidating loans provides you with many advantages. The main thing is that you have the money you need to solve your problem. You will also build your loan limits with instant loan apps as they usually increase the limits based on the timely repayment of the loan. Plus, you’ll have made an investment in the process that you can recoup once you’re done paying off the loan. In addition, the Tosers you purchased may have a higher value by the time you finish paying off your loan and therefore cover the additional costs incurred in the consolidation process. For example, after six to twelve months, the Tosers you bought for Ksh 20,000 may be worth Ksh 30,000.

Consolidation Pitfalls to Avoid

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

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

Finally, make sure you pay off the instant loan applications as soon as you receive money from the online Sacco. If you delay, you could use it and end up with two loans that you can’t properly service. Remember that the figures quoted in this article are only examples.

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