Okolea App Takes to the Lender Space

Getting credit has become a big challenge especially using the conventional ways such as; banks and Sacco. For one to get a loan with a Sacco, they have to save with them for a period, have collateral, guarantors and also have a credible bank statement. It’s quite difficult for those who work in the informal sector like the juakali to meet the above requirements.

Digital lending has come to make Kenyan’s life easier. With just a mobile phone, a registered sim card, and a National Identity Card or a Passport, one can access a loan of between Ksh 100 to Ksh 100,000. The rising number of different Digital lenders has brought about convenience in that one is able to access loans regardless of the time or location.

This is why digital credit is gaining traction. Digital lenders innovate and use different metrics to weigh the credit worthiness of a potential client.

There are more than 45 digital lending platforms in Kenya Today.

Okolea International Limited a homegrown company has taken up a huge role in the digital lending market by ensuring that everyone who is in need of a loan and meets the company’s requirements gets one in a matter of seconds. A client’s limit is increased every time repayments are done on time.

Okolea is one of the first digital players to embrace the duplum rule ensuring interest for late payments do not exceed the principal amount. The in duplum rule is a common law rule that provides that arrear interest ceases to accrue once the sum of the unpaid interest equals the amount of capital outstanding at the time and not the amount of capital originally advanced.

This allows one to borrow only the amount they are in need of and still have a balance on their limit which they can borrow at a later date. The maximum duration of repaying is a month.

Since digital borrowing terms are very attractive, most people ends up borrowing loans without a purpose. This has made many Kenyans have a negative rating with the Credit Reference Bureau thus making it difficult for them to access credit from other lenders in future.

As a company, Okolea acknowledges that some customers might not be in a position to clear their loans within one month that is why the company provides a renewing option. This means that a client pays the interest amount only and the repayment period is extended to another month.

The company has also lowered its interest rates to a minimum 5 per cent for those who pay within 2 weeks and a maximum 15 per cent from its previous high of 20 per cent for one month. Okolea recognizes that having rates fixed per month is detrimental to the welfare of the customer since some customers pay before the month ends. This has led to introduction of interest bands, which depend on time repaid thus passing benefits to those who pay early. The interest bands are 5% for those who pay within 2 days, 8% for one week repayments, 11% for two weeks, 13% for three weeks and 15% for one month.

The opportunities in the lending market continue to increase by the day. The ability to offer a diversified range of financial services on a single platform will serve as a competitive advantage for market participants.

Okolea is now in the process of setting standards in the industry through features that seek to promote responsible lending and to protect consumers from exploitation.

This will ensure that customers can continue to get access to working capital and emergency funds instantly through the ever improving Okolea App. To access Okolea just go to Google Play, download the Okolea App, register and borrow instantly.

“Okolea recognizes responsible lending is key for sustainable growth and launched multiple loans to ensure clients borrow only what they need at a time. This feature has proven popular leading it to be adopted now by leading banks and telecoms.” asserts Mr. Muraya, Okolea CEO.