Qualities of a good lender

QUALITIES OF A GOOD LENDER.

According to the KEPSA report on digital Lending, there are 49 digital lenders currently operating in Kenya. Kenyans use this opportunity to access the cash they need, and 35% of borrowers use the money for household needs, and 37% use it for business reasons. When taking a loan, you must look for a good lending company that offers you friendly terms and protects your interests. The ideal relationship between the lender and the borrower is like that of police officers working as partners; you might not want your partner to take a bullet for you. Still,  you expect that they have your back when trouble emerges. This article outlines qualities to watch out for when looking for an excellent digital lender.

1. Sufficient Lending Limit.

A sufficient lending limit means the lender should have a big enough lending limit so that if you grow, you won’t outgrow your lender. Imagine a situation where you are in the middle of expanding your hardware business, and you need enough working capital to get it done. You contact your lender, and they tell you they cannot accommodate your loan because they don’t have sufficient funds. That’s not good for business. Please make sure you go for a stable lender willing to lend you a higher amount should you need it.

• Flexibility

The Central Bank of Kenya regulates banks and other lending companies. They are subject to regular audit to make sure that they comply with the requirements. However, this does not mean they have the same flexibility. Go for a lender that can provide flexibility in terms of financing. They should be able to avail for you terms that are within your capabilities without breaking any rule, either through lowering your interest rates or extending loan maturity by one month.

• More than a lender, a Partner

Most lenders think highly of themselves and can make you feel like you need them more than they need you. This situation is not good because a lender is your strategic partner. Apart from taking care of your wallet, they should also care about your mind and spirit. They need to offer services that deepen your knowledge and grow your money.

• Experience

The lender’s track record and experience are crucial before taking the loan. You need a lender who knows the ins and outs of the loans and is equipped with the necessary industry skills and knowledge to address your needs. The more experienced a lender is, the better it will be to handle your financial needs.

• Transparent.

It will help if you look for a lender who is open and transparent about their operations. The lender should answer all the questions you have before taking a loan. Data protection to guarantee your information is secured crucial. During loan applications, the information you provide should be confidential and not shared with a third party.

• Find a business lender rather than the asset-based lender.

Your lender should view you as a person with a  business operation that he finances rather than a project that he breaks into parts and sells should things not work out. Such a lender will loan you the needed amount as he sees an integrated operation that is more valuable as a whole than broken up in pieces.

• Interest Rates.

You might want to check the interest rates of the lending company before taking a loan. Some companies charge very high interest. Checking the interest rates and comparing them will help you choose the right company for you. Don’t fall prey to the lowest interest rates available. Unreliable lending companies use this strategy and end up including unexplained charges.

Now that you are in the know, is your lender suitable?