True cost and effective APR of a short-term mobile loan.
Total cost of credit
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Fees (all cycles)
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Excise on fees
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Effective APR
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The fee that looks tiny and annualises into a monster
Mobile loans in Kenya, the Fuliza overdraft, M-Shwari, KCB M-Pesa and the rest, rarely quote an interest rate. They quote a facility fee, a flat percentage you pay to access the cash for a short window. A fee of 7.5 percent for thirty days feels modest next to a 14 percent annual bank loan. It is not. The reason is the window. You pay that whole fee for one month, not one year, so the true annualised cost is many times the headline. This calculator strips away the marketing and shows the total shillings you part with and the effective annual percentage rate behind them, including the excise the government adds on top of the fee.
Borrowing KES 10,000 for thirty days
The default scenario borrows KES 10,000 at a 7.5 percent facility fee for a single thirty-day cycle. The fee this calculator applies is 7.5 percent of KES 10,000, which is KES 750. On that fee sits excise duty, modelled here at 15 percent, adding about KES 113. Your total cost of credit is therefore roughly KES 863 to use KES 10,000 for one month. Scaled to a full 365-day year, that lands at an effective APR near 105 percent. Borrowing the same money on a normal bank loan would cost a fraction of that.
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Rolling over does not change the rate, it multiplies the bill
Here is the trap that catches people. If you cannot clear the loan and roll it for another cycle, you pay the fee again. Borrow KES 5,000 at the same 7.5 percent and the fee is KES 375 per cycle. Take it for the first month and roll it twice, three cycles in total, and you pay that fee three times, around KES 1,125 in fees plus roughly KES 169 in excise, close to KES 1,294 over ninety days on the same KES 5,000. The effective APR stays at roughly 105 percent across one cycle or three, because the cost and the days both grow together. What grows in raw shillings is the cash leaving your pocket. The annual rate is steady, but the total you actually pay triples.
Reading the APR honestly
The APR this tool reports divides the total finance cost by the principal and scales it to a 365-day year. It is a comparison yardstick, not a contractual figure your lender will print. Real mobile-loan products sometimes layer extra charges, daily fees on overdrafts, or tiered pricing that this simple model does not capture, so use the output to judge whether short-term borrowing is wise, not as the exact amount any one app will bill. The excise rate applied here, 15 percent on the fee, follows the duty Kenya levies on money-transfer and lending fees, but excise rates have shifted with recent Finance Acts, so confirm the current rate with the KRA.
Who needs this, and the smarter move
This is for anyone leaning on Fuliza or a mobile loan to bridge to payday, and for budgeters working out whether a small emergency fund would be cheaper than repeated borrowing. The honest judgement is this: a one-off thirty-day draw for a genuine emergency is a reasonable use of an expensive product. Living on rollovers month after month is one of the most expensive habits in Kenyan personal finance, and the APR figure here exists to make that visible. A common mistake is treating the fee as the full cost and forgetting the excise on top, which this calculator adds for you.
Is Fuliza cheaper than M-Shwari?
They price differently. Fuliza is an overdraft that typically charges a daily maintenance fee once you go past a small free threshold, so the cost depends on how many days you stay overdrawn. M-Shwari and similar loans charge a one-off facility fee for a fixed term. This tool models the fixed-fee structure, so for Fuliza enter the total fee you expect across the days you will owe and a matching number of days, then read the APR.
Will defaulting on a mobile loan hurt my credit?
Yes. Mobile lenders report to credit reference bureaus in Kenya, so a missed mobile loan can show up when you later apply for a bank loan or a larger facility. The short term and small size make these loans feel low-stakes, but a default sits on your record like any other. If you are at risk of missing a repayment, talk to the lender before the due date rather than rolling over blindly.