The Okolea loan app always pops up when searching for a digital SME lender in Kenya. They are known to offer up to Ksh 500,000 to qualified customers, something not many digital lenders in the country can claim to have on their portfolio.
Being one of the oldest digital lenders in Kenya, Okolea has undergone several changes. There’s a lot to know about its loan limits, interests, and fee repayment terms, among many others, and that’s where this review comes in handy.
I’ll explain everything there’s to know about the Okolea mobile application to help you decide if this digital SME lender is worth it. Here’s what this post will cover:
- What’s Okolea?
- How does Okolea work?
- How does one qualify for Okolea loans?
- How do you get an Okolea loan?
- How does one repay an Okolea loan?
- What are the pros of Okolea?
- What are the cons of Okolea?
- How does one contact Okolea?
- Is an Okolea loan worth it?
- If not Okolea, then what?
Let’s dive in!
In a hurry? Below is an overview of the Okolea loan app
Okolea Loan App Overview
|Loan Type||Digital SME loan|
|Lender||Okolea International Limited|
|Regulator||Central Bank of Kenya|
|Loan Limit||Ksh 500 – Ksh 500,000|
|Loan Term||30 days|
|Appraisal Fee||Ksh 100|
|Loan Interest||11.5% + Risk markup of 12 – 15%|
|Processing Fee||Ksh 25 – Ksh 300|
|Excise Duty||20% on interest and all fees|
|Disbursement Rate||Bank or M-PESA|
Okolea is a homegrown SME mobile lender regulated and licensed by the Central Bank of Kenya (CBK). Okolea is owned by Okolea International Limited, a Fintech company dedicated to revolutionizing digital lending in the country, especially SME lending.
Interestingly, Okolea International Ltd also owns KB Okolea (in partnership with the Kingdom Bank) and Change Agents (available on the App Store).
According to the company website, there have been over 950,000 downloads and 85% referrals for the app, which shows how big Okolea is in the country.
How Does the Okolea Loan App Work?
Okolea works just like other digital lenders and loan apps in Kenya. You first need to download and install the app on your phone and then sign up for an account if you meet the minimum requirements.
You can then go ahead and log into the app and apply for a loan you qualify for. If you are a new applicant, you’ll need to pay an appraisal fee of Ksh 100 beforehand (which I don’t understand).
New applicants start with a loan amount of Ksh 500, which is not a lot, but the limit grows faster if you are prompt with your payments. According to various sources, the maximum you can get is Ksh 500,000.
Most Okolea loans come with a 30-day repayment period, and they attract an interest rate of 11.5% plus a 12 – 15 risk markup, depending on the borrower’s risk profile.
Another cost you should be wary of is the processing fee, which ranges from Ksh 25 to Ksh 300, depending on the loan size. Other fees I’ll share later are the excise duty and default penalty.
How Does One Qualify for Okolea Loans?
Below are the minimum requirements for getting a loan from Okolea:
- Have a Kenyan national ID
- Have a smartphone, preferably an Android version
- Provide a clear personal photo
- Have an M-PESA registered line or bank account
- Be willing to allow Okolea access to your phone
- Be in good standing with the CRB
How Do I Get an Okolea Loan?
Here are the critical steps for getting a mobile loan from Okolea:
Step 1 (Okolea Loan App Download)
Go to Google Play and search for the Okolea loan app. Alternatively, go to the Okolea International website and use the contact form to request the mobile app, download it, install it on your phone, and proceed to step 2.
Step 2 (Account Signup)
Once the app installs, log in and fill out the application form to register for an account. Ensure you provide accurate personal details to avoid loan disapproval.
Step 3 (Loan Application)
Apply for a loan you qualify for once you sign up for the account. Remember, you’ll need to send a Ksh 100 appraisal if you are a first-timer before your loan application can be evaluated.
You’ll receive the cash via your M-PESA wallet or bank account and are expected to pay within 30 days unless stated otherwise.
How to Repay an Okolea Loan?
Okolea allows you to repay its loans using the USSD code *842# or M-PESA pay bill 245316. Here’s how to go about the pay bill route:
- Go to M-PESA on your phone and pick Lipa Na M-PESA
- Opt for pay bill and enter the Okolea loan app paybill 245316
- Input your registered mobile number as the Okolea account number
- Then enter the amount payable and M-PESA pin
- Click OK to confirm the payment, and that’s all
Remember, you mostly have up to 30 days to repay your Okolea loan plus accumulated interest.
What Are the Pros of the Okolea Loan App?
The Okolea lending app comes with several advantages:
- User-friendly app – Okolea has a user-friendly interface that makes applying for and repaying a loan easy. You don’t have to be computer savvy to know your way around the app.
- Higher limits – Okolea promises loans of up to 3 times your limit once you are prompt with the repayments. You can get up to Ksh 500,000 for business.
- Fast processing and approval – It doesn’t take much time to apply and have a loan approved by Okolea. It’s almost instantaneous, especially when you are repeat borrowers.
- Convenient disbursement – Okolea offers the option of receiving the funds via your M-PESA account or bank. So, the funds are available for immediate use.
- USSD payment – Okolea, as shared, allows you to repay its loans via the M-PESA menu and USSD.
What Are the Cons of the Okolea Mobile Loan App?
On the negative, here are the concerns that come with the Okolea loan app:
a) High interest
Frankly, 11.5% is too much of an interest to pay monthly, especially considering the Hustler Fund charges 8 – 9.5% per annum. Yet, that’s what Okolea imposes on borrowers.
b) Many hidden costs
With Okolea, you must pay a non-refundable appraisal fee of Ksh 100 for your loan request to be evaluated. That’s almost unheard of. Why should you pay something to have your loan request appraised? It beats my mind. And that’s not all.
It’s not just the monthly interest and the appraisal fee you must worry about. You must also pay the processing fee (Ksh 25 – Ksh 300), deducted from the loan amount you qualify for.
For your first loan, you must pay a 12 – 15% markup risk fee, depending on your risk profile.
What if you fail to beat the payment deadline? Okolea slaps you with a 0.5% daily penalty for the first month of default, and the rate continues to increase to the point that it can reach 100%. That’s too much for a loan default penalty.
c) Short repayment period
Okolea offers you up to 30 days to repay its loan, after which the amount will attract a penalty if you default. Frankly, 30 days isn’t much time for most people to repay a loan in full, especially if it’s a business loan that must take time to yield.
d) Privacy concerns
Since Okolea asks for permission to access your phone details (contact list, call log, SMS, media files, among others), you must worry about your privacy. You can’t tell how the lender will use the information or whose hands the information may fall.
e) CRB Blacklisting
Okolea mentions on its website that they’ll forward your details to the Credit Reference Bureau if you default in payment. You surely wouldn’t want that to happen to a credit record you’ve taken time and effort to build.
Okolea Loan App Contacts
Here are some ways you can get in touch with Okolea for inquiries, complaints, or anything else:
- Headquarters office: 1st floor Venus Complex, Office No. 4111, Nairobi
- Phone: +254 742 532 281
- Box number: 41316 – 00100 Nairobi
- Email: customer-care@Okolea-International.com
- Website: contact form on the website
Is the Okolea Loan App Worth It?
We’ve already shared the pros and cons of Okolea. So, you most likely have an answer to this question after weighing both sides.
Honestly, the 11.5% interest isn’t worth it, especially when you must pay the risk markup at 12 – 15%. It’s also not worth it getting into CRB’s famous blacklist.
Let’s say you manage to beat the deadline and pay your loan. Will that stop you from borrowing? Most likely not.
Do you know why? That’s because Okolea will promise you a higher limit on your subsequent loan request, which convinces you to borrow and continue doing that.
Sadly, you might not realize that Okolea and other digital lenders are a debt trap. You’ll likely be borrowing even when you don’t need the money.
If Not Okolea, Then What?
Since we don’t advocate for Okolea and other small business loans, you most likely worry about what to do. What do you do when you want money for your small business?
Well, not all funding options involve getting a loan. For example, you can apply for business grants from the government to run and grow your business. They are a bit competitive, but the advantage is that most grants do not require paying back.
You can also try crowdfunding, where members of the public and willing small investors invest in your business with the promise of offering them something like shares. You could even crowdfund from friends and families.
Alternatively, you can find an alternative income source, such as starting a side hustle to bring in some extra cash. There are numerous side hustling opportunities online and offline to consider.
The Okolea loan app may offer temporary financial reprieve to SMEs, but the risks of borrowing make it not worth it. So, as Cent Warrior, we don’t advocate for such borrowing. On the contrary, we champion living a debt-free life and believe that’s possible with sound financial education.
Recently, we’ve been sharing how you can get out of debt forever and attain financial freedom in our new book, ‘Winning Against the Game of Debt.’ You should check it out online to discover what to do to ultimately enjoy the financial freedom you rightly deserve!