Fountain Enterprise Programme (FEP) Group’s microfinance arm has launched a mobile app disbursing 30-day loans at a one-off processing fee of eight per cent.
Dubbed Instaloan, the app had by end of July loaned out Sh31 million after its April launch, targeting Kenyans locked out of the credit market by banks due to the rate caps.
Fountain Credit said the average loan size currently stands at Sh8,500 with an active client base of 2,261 users out of the micro-lender’s 13,000 customers.
Instaloan dispenses loans via M-Pesa and entrepreneurs can access small loans of up to Sh100,000 repayable within 30 days.
“The future for mobile-based loan apps is greater than traditional banking models,” said Lucy Luchinga, commercial manager at Fountain Credit.
“We are making a decent return from this product. Our return on operating capital is potentially over 50 per cent yearly net of all expenses,” the manager said.