These loans are given for the purchase of homes or to build homes. With the housing shortage in Kenya, these loans are very welcome. The banks’ target the high and medium income families and the low income families are left out. The government has introduced the low income housing projects to bridge this gap.
The loans may be sponsored 100% by the banks. Some banks prefer that the applicant finance a stated percentage of the amount borrowed. Different banks have different rates that they offer to the applicants.
For both small and large businesses the banks are relevant because businesses required loans. The loans may be start-up loans or loans to help with cash flows. Some businesses have overdraft facilities with banks to ensure that their business do not fail to meet their financial obligations at any time. The Jua Kali industry in Kenya, which has employed a large percentage of the population in Kenya, is now able to access loans through the small and micro economic packages that are availed locally. The packages may be locally or internationally initiated.
The applicant is assisted to purchase a personal vehicle or a fleet of vehicles for business purposes. The percentage of financing is dependent on the individual banks. Some banks finance 100% while others require the applicant to raise a percentage of the loan amount. The transport industry has relied on these loans to run their businesses. The aviation industry together with the rail transport who require heavy capital outlay also rely on these category of loans.
4. Home improvement Bank Loan
These types of loans may range from additional construction for already existing buildings to furnishing the homes. Many customers are not aware that they can get these kinds of loans from the banks and they often approach their Savings and Credit Co-operative society (SACCO) account. The customers get loans to buy furniture or electronic equipment for their homes.
5. Personal Bank Loan
The personal loans may be secured or unsecured loans. These range from salary advance loans or emergency loans. The banks may require that the applicant’s salary be received in the bank advancing the loan.
6. Investment Bank loan
Investment loans include, but are not limited to borrowing funds to invest in shares. Banking in Kenya was treated to frenzied action a few years ago when initial public offers for various companies were floated. The banks started to advertise and give loans to customers to avail funds to purchase the floated shares. The Shares are used as collateral.
7. Educational Bank Loan
Banks avail loans to assist students or parents to pay for education. The loans are not a preserve of the SACCO but are also available in the banks. Apart from the school fee schemes by the banks, the banks are becoming more innovative and are partnering with education institutions to avail the loans.
The Kenyan population should take advantage of the available loans on offer by the banks. Before applying for the loans, ensure you have looked at the costs of the bank loan and compared it with similar offers available in the banking industry.
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