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What a mobile loan actually costs in Kenya (2026): the fees nobody quotes upfront

The full stack of fees on a Kenyan mobile loan, and how to compare like-for-like.

AO
by Reviewed by Michael Mwangi 10 min read Updated 26 August 2026Verified 26 Aug 2026

The fee stack on a typical mobile loan

1. Facility fee (or interest)

The headline lender charge. Flat percent of the disbursed amount on app-based lenders (Tala, Branch, Zenka), a per-30-day facility fee on bank-backed products (M-Shwari, KCB M-PESA), or a small annualised interest on subsidised products (Hustler Fund at 8 percent p.a.).

2. Excise duty on the fee

Kenya applies excise duty on fees charged by financial institutions on loans, per the Excise Duty Act, 2015 and subsequent Finance Act updates. It is calculated on the lender fee, not on the principal, and is added on top. That is why a "7.5 percent" M-Shwari loan repays more than principal plus 7.5 percent: the excise sits on top of the 7.5 percent fee.

The exact excise rate has moved in successive Finance Acts; verify the current rate against KRA or the current Finance Act.

3. Processing fees and access fees

Fuliza has both a one-off access fee at drawdown and a daily maintenance fee. Some app lenders bake a processing fee into the disbursement (you receive less than the loan amount you accepted). Read the confirmation screen: if the disbursed amount is less than the accepted amount, a processing deduction has been applied.

4. Insurance

Some products (Timiza, HFC Whizz, and some SACCO loans) include a small credit-life insurance component in the total repayable, protecting the balance on borrower death or disability. Read the disclosure.

5. Penalty and rollover fees

Late repayment carries penalty interest and, on rollover, a fresh facility fee plus fresh excise. Two consecutive rollovers can double the effective cost of a 30-day loan.

Worked example: a KES 5,000 loan

For illustration only. Actual figures depend on the specific lender and current Finance Act rates. The pattern is the point:

  • Loan accepted: KES 5,000.
  • Facility fee, 7.5 percent: KES 375.
  • Excise on the fee, illustrative 20 percent of the fee: KES 75.
  • Disbursed to M-PESA: KES 5,000 (or less if processing deducted).
  • Total repayable on due date: KES 5,450.
  • If repaid 15 days late with penalty of, say, KES 100 and rollover fee of KES 375 + fresh excise: total on the new due date could be KES 5,950 or more.

The gap between the KES 375 headline and the KES 950 real cost after one rollover is the trap. See the annualising method at mobile loan effective APR explained.

How to compare like-for-like across lenders

  1. Pull up the total repayable on the confirmation screen at each lender for the same amount and tenure.
  2. Subtract the disbursed amount from total repayable to get the cost.
  3. Divide cost by disbursed, multiply by (365 / tenure days) to get the effective annualised rate.
  4. Do the same for the penalty and rollover scenario. That is your true worst case.

What honest disclosure looks like

Honest lenders display total repayable, tenure, and per-day cost at loan acceptance. Beware of app lenders that only show the headline facility fee without excise, without insurance, and without penalty scenarios in the disclosure flow.

Sources

  1. Excise Duty Act, 2015, Republic of Kenya, and successive Finance Act amendments.
  2. Kenya Revenue Authority. Excise duty guidance on financial services.
  3. Central Bank of Kenya. Digital Credit Providers Code of Conduct, 2022.
  4. Specific lender rate cards as disclosed inside their apps or on published pricing pages; verify current figures directly.

FAQ

Why is my loan repayment more than the fee I was quoted?

Kenyan mobile loans typically stack: (1) headline facility fee, (2) excise duty on the fee under the Excise Duty Act, (3) sometimes a processing or insurance component, and (4) rollover or penalty fees if you miss the date. The number on the confirmation screen is the total.

What is excise duty on a loan?

Kenya levies excise duty on fees charged by financial institutions on loans. The rate has been updated in successive Finance Acts and is applied on top of the lender fee, not on the principal. Verify current rate against the most recent Finance Act or KRA guidance.

How do rollover fees work?

If you cannot repay on the due date, most lenders offer a rollover: a new loan on the outstanding balance, priced at the same or higher facility fee, plus a fresh excise, plus any penalty accrued between due date and rollover. Two rollovers can double the effective cost of a 30-day loan.

Further reading

Curated external sources we cite. Open in a new tab.