Okash

Understanding Okash: A Key Player in Kenya's Digital Lending Scene

Okash has firmly established itself as a significant force in Kenya's rapidly expanding digital micro-lending sector. Launched in March 2018, it operates under TenSpot Pesa Limited, a local entity ultimately linked to OPAY Digital Services, a subsidiary of the Hong Kong-registered Opera Group. This digital platform leverages advanced technology to provide quick and accessible unsecured loans, primarily targeting both salaried individuals and those in the informal sector aged between 20 and 55 years old.

The company's business model is centered on delivering short-term micro-loans through convenient digital channels, primarily its mobile application and USSD services. Okash partners with Blue Ridge Microfinance Bank for loan origination, ensuring a regulated framework for its lending activities. By doing so, it has successfully disbursed millions of micro-loans, harnessing data-driven credit scoring and the widespread use of mobile money platforms like M-Pesa to serve segments of the population often overlooked by traditional financial institutions.

TenSpot Pesa Limited, trading as Okash, is registered in Kenya under the Companies Act. While specific executive names for TenSpot Pesa Limited remain largely unverified in public records, the company's operational footprint and market penetration are undeniable, reflecting a robust management and strategic direction.

Okash Loan Products, Rates, and Terms

Okash offers straightforward unsecured personal loans, primarily accessible via its dedicated mobile application and, to a lesser extent, through USSD codes. These loans require no collateral, relying instead on a sophisticated digital assessment of an applicant's financial behavior.

Loan Amounts and Duration

• Minimum Loan: KSh 1,000
• Maximum Loan: KSh 50,000 (primarily through the app)
• Loan Tenure: Ranging from 15 to 30 days for USSD applications, and a broader window of 30 to 365 days for app-based loans. Repayment can be made in a single lump sum or staggered installments.

Interest Rates and Fees

Understanding the cost of borrowing is crucial for any potential Okash customer. The company applies a dynamic fee structure that can vary based on an individual's credit profile.

• Daily Interest: Rates typically range from 1.2% to 2.0%.
• Effective Annual Percentage Rate (APR): This can be significantly high, reaching up to approximately 182.5% in some cases, reflecting the short-term nature and risk profile of these micro-loans.
• Typical Monthly Rates: Borrowers can expect monthly rates to hover between 5% and 18%, with a median often around 14%.
• Processing Fee: A percentage of the principal amount, ranging from 5% to 25%, is applied as a processing fee. This is dynamic and depends on the borrower's credit assessment.
• Origination Fee: For longer-term loans, such as those with a 91-day tenure, an origination fee of up to 8.7% may apply.
• Late Payment Fee: A penalty of 2% per day is charged on the outstanding balance if repayment is delayed.
• Non-refundable Verification Fee: USSD loan applications may incur a KSh 95 verification fee.

All repayments are primarily facilitated through the M-Pesa paybill number 612224, offering a convenient and widely used method for Kenyan users.

Application Process and User Experience

Okash prides itself on a streamlined and fully digital application process designed for speed and convenience, reflecting its commitment to leveraging mobile technology.

Application Channels

The primary method for accessing Okash loans is through its mobile application, available for both Android and iOS devices. While a USSD option exists, the app provides a more comprehensive set of features and potentially higher loan limits.

Know Your Customer (KYC) and Onboarding

To apply, users must download the Okash app and register using their phone number and national identification document. The KYC process involves verification of the National ID, analysis of M-Pesa transaction history, and in some cases, linkage to a bank account. An electronic signature is required to agree to the loan terms and conditions.

Credit Scoring and Disbursement

Okash utilizes a proprietary credit scoring algorithm that analyzes various digital behavioral data points, including telecom data, banking transactions, and app usage patterns. This automated underwriting process allows for instant loan approvals, often within minutes. Once approved, funds are typically disbursed rapidly via M-Pesa mobile-money transfer, which is the primary method, or to a linked bank account.

Mobile App Features and User Experience

The Okash Android app, available on Google Play, boasts over one million installs and a rating of 4.2 stars from hundreds of thousands of reviews. While an iOS version exists, its rating for the Kenyan market is not readily available. Key features of the app include:

• A loan calculator to estimate costs.
• An application tracker to monitor loan status.
• Digital e-signature for agreements.
• Repayment scheduling tools.

Customer reviews frequently praise the speed of the loan disbursement process, highlighting its efficiency in urgent financial situations. However, common complaints often revolve around the high interest rates and, at times, app instability or perceived misleading advertised rates. The company supports its users through a customer service hotline (+254 20 7659988), email ([email protected]), in-app chat, and social media channels.

Collection and Recovery

Repayment reminders are sent via automated SMS and in-app notifications. Okash also employs M-Pesa auto-pay mandates and a dedicated debt-collection team for manual follow-up on delinquent accounts.

Regulatory Compliance and Market Position in Kenya

Operating within Kenya's financial landscape requires adherence to established regulations. Okash, through its operating entity TenSpot Pesa Limited, ensures its operations are compliant.

Licensing and Oversight

Okash’s lending activities are underpinned by its partnership with Blue Ridge Microfinance Bank, which is licensed by the Central Bank of Kenya (CBK). TenSpot Pesa Limited itself is licensed as a credit reference bureau user, allowing it to access and contribute to credit information, which is vital for its credit scoring models. The company states adherence to the CBK's micro-lending guidelines and Kenya's Data Protection Act, ensuring consumer protection through transparent fee disclosures and mandatory e-signatures for loan agreements.

Market Standing and Competition

Okash holds a strong position among the top five digital lenders by volume in Kenya. It competes fiercely with established players such as Tala, Branch, Timiza, and M-Shwari. Each competitor offers unique value propositions:

• Tala: Known for its wider app ecosystem and rapid credit lines up to KSh 50,000.
• Branch: Offers longer tenures and deeper credit lines, potentially up to KSh 300,000.

Okash differentiates itself through its integration with OPAY payment services and its dynamic fee structure, which aims to tailor costs to individual creditworthiness. The company has shown significant growth, with reported revenues of KSh 235 million from 280,000 loans in the fourth quarter of 2018, and daily transactions exceeding KSh 10 million by December 2020. Its strategic partnerships with Safaricom for M-Pesa integration and Blue Ridge Microfinance Bank are crucial to its operational success and reach.

Practical Advice for Potential Okash Borrowers

For Kenyans considering an Okash loan, a prudent approach is essential. Digital loans, while convenient, come with specific financial commitments.

Before You Apply:

1. Understand All Terms: Carefully read and comprehend the interest rates, processing fees, origination fees, and especially the late payment penalties. Do not solely rely on advertised rates; use the in-app loan calculator to get a precise breakdown of total repayment amounts.
2. Assess Affordability: Before accepting any loan, honestly evaluate your ability to repay it within the stipulated timeframe without straining your finances. Borrowing beyond your means can lead to a cycle of debt, exacerbated by high daily late fees.
3. Compare Options: Okash is one of many digital lenders in Kenya. Take the time to compare its offerings with competitors like Tala, Branch, Timiza, and M-Shwari. Look for the most favorable interest rates, fees, and repayment terms for your specific needs.
4. Check Your Credit Profile: Understand that your digital footprint and M-Pesa transaction history significantly influence the loan amount and terms you are offered. Maintaining a healthy financial record can improve your eligibility and potentially reduce costs in the long run.
5. Utilize Customer Service: If any aspect of the loan agreement is unclear, do not hesitate to contact Okash's customer service via their hotline, email, or in-app chat for clarification before signing any agreement.

During Repayment:

• Prioritize Repayment: Make timely repayments to avoid accumulating late fees, which can quickly inflate your outstanding balance.
• Maintain a Good Credit History: Successful and timely repayment of Okash loans can positively impact your credit score within their system and potentially with credit reference bureaus, leading to better offers in the future.

Okash offers a valuable financial tool for many Kenyans seeking quick access to funds. However, like all financial products, it demands careful consideration and responsible usage to prevent financial distress. By understanding its operational framework, fee structure, and the competitive landscape, borrowers can make informed decisions that serve their financial well-being.