This archive report was first published on 14 January 2020.
January is often a challenging month for Kenyans, with the added expenses of the Competence-Based Curriculum (CBC) on top of the usual school fees.
However, with the evolution of financial technology and planning, there are now various options available to ease the financial pinch of January expenses.
One such option is mobile lenders, which have been a subject of controversy due to high-interest rates and data breach claims.
Despite these concerns, there are cases where mobile lenders have been used to build successful businesses, such as the engineer who built his real-estate company using student loans, as reported by Business Today.
Assuming a budget deficit of Ksh10,000, it makes sense to borrow and pay back in February when you receive your January salary or reconcile your books for the month.
Another option is Saccos, which operate a model where you contribute monthly and become eligible for a loan three times the amount you have contributed after a given period.
Some Saccos also offer assistance to members experiencing difficult times, making them a plausible option in January.
Microfinance institutions are another available option, offering short-term loans ranging from Ksh10,000 to Ksh20 million if you provide collateral.
Logbooks, title deeds, salary, guarantors, and shares of listed companies can all act as collateral, with interest rates varying depending on the institution.
Borrowing from family and friends is also a viable option, especially if you maintain a healthy credit score with the people next to you.
It is essential to make sure that you never default on loans acquired from family and friends, as they are the easiest people to ask for interest-free credit.
