EXPLAINER: What borrowers should check before taking a mobile loan

Before clicking “Accept,” pause. Here’s what every borrower should verify:

1. Is the lender licensed?

Confirm the lender is approved by the Central Bank of Kenya (CBK).

Unlicensed apps risk sudden shutdown — and offer little consumer protection.

2. What is the total cost of the loan?

Do not focus only on the interest rate.

Check:

• Processing fees
• Insurance charges
• Excise duty
• Penalties for late payment

Ask yourself: How much will I repay in total?

3. What is the repayment period?

Short repayment windows (7–30 days) can trap borrowers in rollovers.

Make sure the timeline matches your income cycle.

4. What happens if you delay?

Read the fine print on:

• Late payment penalties
• Additional interest
• Collection practices

No lender should harass you or access your phone contacts unlawfully.

5.  How is your data handled?

Licensed lenders must:

✔ Have a Data Protection compliance certificate

✔ Clearly state how your data is collected and used

✔ Protect your personal information

If the app requests excessive permissions (contacts, photos, messages), be cautious.

6. Can you afford it?

Borrow only what you can repay without taking another loan.

If repayment requires borrowing again, that is a red flag.

Remember

Mobile loans are convenient--but convenience can be costly.

With tighter regulation now in place, borrowers have more protection.

But vigilance remains your first line of defence.