With an average annual growth of 5% for the last decade, Kenya has established itself as one of the fastest-growing economies in Sub-Saharan Africa. Many Kenyans aspire to take up a career in business and become entrepreneurs, hoping that they too can participate in this economic boom and cash in on this lucrative opportunity. With so many people interested in investing their money in business ventures, the number of logbook loan providers offering to finance Kenyan businesses has also surged.
The country’s changing economic situation, coupled with a generally unsupportive credit market, has led many people to turn to logbook loan financing as a source of working capital.
In this article, we will discuss 8 popular reasons Kenyans choose logbook loan financing over other types of loans.
1. Start or Expand a Business
When the economy is performing well, it is often easier for start-up companies to find investors willing to finance their operational expenses. When economic growth is strong, businesses have an easier time gaining access to short-term credit, such as business loans or overdrafts, which can fund inventory purchases and operational expenses.
However, when the economy is performing poorly, it can be more challenging for companies to get the financing they need to start up or expand their operations. As a result, they’re more likely to rely on alternative sources of financing, such as logbook loan financing. When the economy is performing well, access to credit is generally easier. The availability of credit in the economy has a strong impact on the number and type of logbook loan financing issued.
As the economy grows and credit becomes more accessible, the number of logbook loan offerings typically decreases. This is because more traditional financing options become available and, as a result, lenders turn away from logbook loan financing to focus on more conventional forms of financing.
2. Make Quick Investments
As they say, opportunity knocks only once.
The truth is, not many Kenyans have money lying around for when an opportunity comes knocking. For example, let’s say you find a very good ‘deal’ on a piece of land in a prime area, but you do not have the money.
You start imagining how you could develop it or even use it to speculate. You are sure you can’t let that opportunity slip by. What do you do? If you own a car, a logbook loan financing can be exactly what you need at that exact moment. This is another popular reason Kenyans go for logbook loans.
Because, unlike many other loans, like digital loans, the loan is based on the value of your vehicle, and you can, therefore, borrow as much as you need up to 50-80% of your car value
3. Debt Consolidation
Logbook loans can be used as a form of debt consolidation. It is also one of the main reasons why many Kenyans consider logbook loan financing.
If you are stuck with a few loans that need your attention every month, you can take out a logbook loan, pay off the balance of your outstanding loans and then make one payment to your new logbook loan lender. Debt consolidation makes it easier to manage your liabilities as a single unit.
In addition, if you are already in the red, it is a great way to lower your stress levels because you will not be getting dozens of calls from different debt collectors.
4. Medical Emergency
One of the major expenses Kenyans incur is medical bills. In some cases, hospitals need full payment before starting any medical procedure. It can be a hassle when you or your loved one need urgent medical attention.
Hence, in cases where the medical bill is above the amount at hand, and no medical cover is in place, many Kenyans turn to loans to help raise the funds for medical care.
Due to their efficiency and urgency, logbook loan financing is a popular option in such instances. A logbook loan allows you to access a significant amount urgently. Visit Mwananchi Credit and get your logbook loan processed in three hours or less.
5. Cash Injection For Stalled Projects
Many Kenyans turn to logbook loans when their project funds run dry and leave the project stalled.
For example, suppose you are building your dream home and the expenses go above the budget before completion. In such a case, logbook loan financing is a solid solution. You can use your vehicle as collateral to acquire funds to complete the project, and then pay back the funds later on.
Also, to some people, spending a few thousands a month to pay back a loan is more practical than dropping Ksh.500,000 at once to do the finishing on a completed house.
6. School Fees
Education in this country can be costly, especially college or university education. It is not uncommon to see students or even parents take out quick loans to help pay or top-up school fees.
Although student loans like HELB are the best option to pay for education, they are not available for everyone, and even when they are, they might not be sufficient to cover all school-related expenses.
In such cases, a parent or a student might need to turn to other available options like logbook loans to help pay these expenses.
7. When Moving or Relocating
If you are moving within the same town, you might not need to spend a lot on moving expenses. However, if you are moving to a different town or maybe even outside the country, you might need a lot more to cover the cost of packing, hiring movers, and transporting your belongings to your new residence.
In addition, if you are moving into an apartment, you might need to cover the costs of the first month, last month, and a security deposit. In some cases, you may also need some cash to furnish your new home.
Some Kenyans find logbook loans a convenient and easy way to get quick cash top-up to help through the process of moving and settling in a new place.
8. A Major Life Change
There are also many other significant life changes that prompt Kenyans to take out a logbook loan. Things such as divorce, career changes, death of a loved one, etc.
These changes come with emotional and financial costs that if you are not very well prepared financially, you might need a quick fix to help save the day. And a logbook loan can be just the fix you need to help position you so you can plan yourself for the future.
It is always advisable to have an emergency fund for such situations, but if you’re in a pinch and need money to hold you over, you may be able to get a logbook loan in a matter of days (even hours depending on the lender.
Logbook loans are a great option because you can use them for virtually anything. You can use a logbook loan to cover an emergency or as a boost when you have a stalling project or even to pay for a professional course to get a promotion at work. Visit Mwananchi Credit, the number one logbook loan provider in Kenya for the best and affordable rates on your logbook loan.