Centum-owned micro lender targets Sh1bn salary-secured loans to civil servants

Jafari Credit, a microfinance lender plans to disburse salary-secured loans to government employees, with a target to grow its loan book to Sh1 billion by the end of this year.

The micro-lender has already advanced Sh450 million by way of small loans exclusively set aside for civil servants and employees of other government agencies, it said.

Jafari Credit, which is fully owned by the Nairobi Securities Exchange (NSE) listed Centum Investment Company Plc, already has 4,000 customers exclusively comprising of public servants.

“Our goal in this financial year is to serve over 12,000 customers and ensure we disburse Sh1 billion in loans,” said the company CEO, Edwin Munyiri

in a statement.

The clientele base for Jafari Credit includes teachers, civil servants and employees of select parastatals.

They mostly borrow money to pay medical bills, school fees, cater for burial expenses, buy land, cars and furniture as well as take vacations, said the firm.

Kenya has about 2.5 million public servants who are mostly employed on permanent and pensionable terms.

Borrowers need to present their identity cards, and three-month payslips and authorize direct salary deductions to settle their loans.

The average loan amount is about Sh120,000, but customers can access advances of as low as Sh5,000 in the form of salary-secured loans and salary advances. The repayment period is up to 144 months.

“Our lending cycle is largely driven in the first three weeks of the month and back-to-school drives,” said the Jafari Credit boss.

The sole shareholder, Centum Investment Company Plc, is the primary financier of the microlender.

Strict borrower due diligence and employer engagement has ensured that Jafari loans remain performing, with a negligible default rate of 2 per cent, said the agency. The loans are also insured against the death and disability of borrowers.

Jafari Credit boasts a loan application and disbursement turnaround time of 24 hours.

“Our operations teams seek to serve client emergencies and needs in a timely fashion, setting us apart in the market,” said Mr Munyiri.

Jafari Credit has 18 branches across the country including in Nairobi, Nakuru, Narok, Nyeri, Kajiado, Garissa, Machakos, Kakamega, Malindi, Mombasa, Kabarnet, Bungoma, Kisii, Homabay, Isiolo, Bomet and Eldoret.

“Our goal is to have nationwide reach to meet customer needs in a timely manner,” said the Jafari Credit boss.