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Cheapest Loans in Kenya Revealed After Excise Duty Law
Cheapest Loans in Kenya Revealed After Excise Duty Law
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Cheapest Loans in Kenya Revealed After Excise Duty Law

Eric Ndubi, Managing Editor
July 16, 2021

Absa Kenya’s Timiza mobile loan facility became the cheapest short-term loan (30 days) in Kenya from July 1, 2021, when the 20% excise duty tax on fees and commissions earned on loans took effect.

Previously, this position was held by KCB Bank’s Vooma mobile loan facility which was the successor of the now discontinued KCB Mobiloan - the latter which also had been the cheapest 30-day mobile loan for a while. 

Overall, the cost of credit across banks, microfinance institutions and digital lenders has increased courtesy of the new duty. 

While the cheapest 30-day loan by the end of June (Vooma) had a total cost of credit of 5.91% (as calculated by combining the loan interest and other related fees), the new cheapest loan (Timiza) has a total cost of 6.625% courtesy of the excise duty. 

The Parliamentary Finance and Planning Committee in rejecting the plea from bankers to exclude fees and commissions from excise duty said the decision was guided by the government’s policy to reduce tax incentives. 

The taxman is now expected to net additional Ksh7 billion from lenders in taxes on commissions and fees they charge on processing fees. Last year the figure amounted to Ksh35.87 billion. 

Top 4 Cheapest 30-Day Loans in Kenya Today

With the introduction of the 20% excise duty on “fees or commissions” earned by financial institutions on a loan, lenders scrambled to review the cost of their loans to comply with the law. 

However, as the Money254 commercial team has found, the formulae the lenders used led to disparate outcomes that toppled the prior hierarchy of the cheapest to the most expensive loans. 

  1. Timiza

The total cost of a Timiza loan increased from 6.08% to 6.625% after the excise duty was factored in making it the cheapest 30-day loan in the market.

  1. Vooma

In contrast, the total cost of a Vooma loan, which was initially the cheapest, increased from 5.91% to 6.91%, a one percentage point increase making it the second-cheapest 30-day loan.

  1. KCB M-Pesa

KCB M-Pesa comes in third with the total cost of its 30-day loans increasing from 7.35% to 8.64%. 

  1. M-Shwari

Safaricom’s M-Shwari ranks the fourth-cheapest at 9% in total loan cost, up from 7.5% before the introduction of the excise duty on fees and commissions. 

Lenders across the sector have increased the total cost of their loans in varying proportions in reaction to the introduction of the duty.

Money254 has just concluded updating the new rates for all lenders in our loan comparison tool. You can check what your favourite lender is charging today using this link and compare with others to help you get the loan that best suits your needs. 

Eric Ndubi is the Managing Editor at Money254. He holds an MSc in Media and Communications from the London School of Economics and Political Science. Prior to leading Money254's editorial team, he worked as the Editor at, social media manager at Citizen TV and editorial manager at You can find him on twitter @Eric_Ndubi

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