Interest-Free Loans in Kenya

Yes, some loans come with zero interest — no tricks. Just repay on time and enjoy the benefit. It’s perfect for short-term needs.

Online application

Zenka offers mobile loans in Kenya ranging from KSh 500 to KSh 200,000, with repayment terms up to 61 days. The first loan is interest-free, meaning borrowers only repay the amount they borrowed. For future loans, interest rates range between 2.45% and 39%, depending on the loan term and the borrower’s credit history.

Advantages

Fast Approval: The loan application process is quick, with approvals granted in minutes and funds transferred to M-Pesa within 5 minutes.
Flexible Repayment Options: Borrowers can extend their loan terms by 7, 14, or 30 days, with an added fee, providing more flexibility in repayment.
Increasing Loan Limits: Regular repayments can help increase your credit limit, allowing you to borrow up to KSh 200,000.
No Hidden Charges: The first loan comes with no extra fees or interest, meaning you only repay the amount you borrow.
Easy-to-Use App: Zenka’s mobile app is user-friendly, and support is available through USSD for those who prefer not to use smartphones.

Disadvantages

High Interest Rates: The effective annual interest rate can reach as high as 4432%, which makes subsequent loans expensive if they are not repaid promptly.
Limited to One Active Loan: Zenka allows only one active loan at a time, although top-ups within the available credit limit are possible.
Risk of Reduced Credit Limit: Late repayments can lower your credit limit and result in extra penalties.

If you’re confident that you can repay your loan on time, Zenka offers a convenient and speedy option for accessing funds.

Online application

Gulf African Bank offers interest-free financing (Murabaha) for amounts ranging from KSh 100,000 to KSh 6,000,000, with repayment terms of up to 20 years. The loan process takes about 4 working days, with flexible repayment options tailored to the client’s needs, including insurance and personalized support.

Advantages

Full Financing Available: Gulf African Bank provides up to 100% of the requested loan amount if all conditions are met, ensuring quick access to funds.
Competitive Profit Margins: The bank’s rates are designed to be competitive while staying true to Shari’ah principles, ensuring ethical financing.
Flexible Repayment Terms: Clients can choose a repayment period that suits them, with options extending up to 20 years.
Fast Processing Time: The bank processes loan applications within 4 working days, so customers don’t have to wait long for funds.
Shari’ah Compliance: All loan products are fully in line with Islamic law, giving customers peace of mind knowing they are engaging in ethical transactions.

Disadvantages

Document Requirements: Borrowers must provide various documents such as income statements and bank records, which can be cumbersome for some clients.
Loan Amount Cap: The maximum loan amount available is KSh 6,000,000, which may not be enough for larger-scale financing needs.
Credit History Consideration: Loan approval is heavily influenced by the borrower’s credit history, which may limit access to some potential customers.

In my opinion, Gulf African Bank offers a solid option for anyone seeking Shari’ah-compliant financing, provided you’re okay with the documentation and the loan limits.

Online application

First Community Bank (FCB) offers interest-free financing (Murabaha) with loan amounts ranging from KSh 100,000 to KSh 6,000,000 and repayment periods of up to 20 years. The entire loan process takes up to 4 working days, and customers can enjoy flexible repayment options that include personalized services and insurance options.

Advantages

Full Financing: The bank provides up to 100% of the loan amount requested if all conditions are met, making it easier for borrowers to access the funds they need.
Competitive Profit Rates: FCB offers rates that align with Shari’ah principles, so customers can feel assured they are getting a fair deal that meets ethical guidelines.
Flexible Repayment Options: With repayment terms extending up to 20 years, clients have plenty of time to settle the loan, tailored to their financial situation.
Quick Loan Processing: The loan approval and disbursement process is efficient, usually taking no more than 4 working days, allowing clients to access their funds without delay.
Shari’ah Compliance: All of FCB’s financial products are in line with Islamic law, so clients can trust that their loan is structured ethically and in compliance with their beliefs.

Disadvantages

Documentation Requirements: The need for multiple documents, including income verification and bank statements, may make the process more cumbersome for some customers.
Loan Amount Cap: The bank’s maximum loan amount is KSh 6,000,000, which might not be sufficient for individuals or businesses needing larger sums.
Credit History Impact: A borrower’s credit history plays a significant role in the loan terms, which may limit access for some customers with less-than-perfect credit scores.

I think First Community Bank offers solid, ethical financing options for anyone looking for an interest-free loan in Kenya, but be prepared for the documentation process and ensure the loan cap aligns with your needs.

Online application

KCB offers interest-free Islamic loans (Murabaha) under its SAHL banking division, with amounts ranging from KSh 100,000 to KSh 8 million and repayment terms of up to 6 years. The loan process is transparent, with clear disclosure of goods’ costs and profit margins, fully adhering to Sharia principles.

Advantages

Sharia-Compliant Financing: KCB’s SAHL products comply with Islamic financial principles, ensuring ethical and law-abiding transactions.
Flexible Repayment Terms: Loan repayment periods extend up to 6 years, making it easier for customers to manage repayments according to their financial situation.
Transparency: All costs, including markup and fees, are clearly explained upfront, so clients know exactly what they’re getting into.
Accessible to a Range of Customers: Whether you’re an individual or part of a larger organization, these products are available to a wide range of customers.
Support for Small Businesses: KCB also offers financing solutions for Local Purchase Orders (LPO), which helps small and medium enterprises grow.

Disadvantages

Loan Amount Limitations: The maximum loan amount is capped at KSh 8 million, which might not meet the needs of larger projects or businesses.
Documentation Required: Customers are required to provide several documents, such as proof of income and bank statements, which may be time-consuming for some.
Credit History Considerations: Loan eligibility can be influenced by your credit history, which might limit access for those with a less-than-ideal financial record.

KCB’s interest-free loan offerings under the SAHL program are a great choice for those seeking ethical, Sharia-compliant financing, though the loan limits and documentation process should be considered beforehand.

Online application

Absa Bank Kenya offers interest-free Islamic loans (La Riba), with loan amounts ranging from KSh 100,000 to KSh 6,000,000, and flexible repayment terms of up to 72 months. The loans are available in both secured and unsecured forms, with fixed profit rates based on your income and relationship with the bank.

Advantages

Flexible Repayment Options: With repayment periods of up to 72 months, you can adjust the loan terms to better match your financial situation.
Clear Terms: Absa provides clear, fixed profit rates, meaning no hidden costs or surprises throughout the life of the loan.
Accessible to a Wide Range of Clients: Whether you’re an employee or a self-employed individual, these loans are open to a variety of customers.
Support for Small Businesses: The bank provides financing solutions that help small businesses grow, including support for Local Purchase Orders (LPO).
Compliant with Sharia Law: All of Absa’s Islamic financing products strictly follow Sharia law, ensuring ethical and legal transactions.

Disadvantages

Loan Amount Limitations: The maximum loan amount of KSh 6,000,000 might not be sufficient for large-scale projects or business expansions.
Documentation Requirements: Applying for these loans requires providing multiple documents like proof of income and bank statements, which might be a hassle for some applicants.
Credit History Considerations: Your credit history plays a significant role in determining your eligibility and the loan terms, which could limit access for some individuals.

Absa Bank Kenya offers a solid option for anyone looking for ethical, Sharia-compliant financing, but be mindful of the loan limits and documentation process.

Online application

Lipa Later offers a flexible Buy Now, Pay Later (BNPL) plan, where customers can break up payments for products into 2 to 12 months. With a fixed interest rate of 4.2% per month, it allows consumers to make purchases without the pressure of paying everything upfront.

Advantages

Flexible Repayment Options: You can choose a repayment term that fits your budget, with options ranging from 2 to 12 months.
Clear and Simple Terms: The 4.2% monthly interest rate is fixed, so you know exactly what you’re getting into without any hidden charges.
Wide Selection of Products: Lipa Later works with a wide variety of retailers, giving you the flexibility to purchase electronics, home appliances, and other consumer goods.
Easy and Convenient Process: The application process is straightforward and can be done through a mobile app or online, making it quick and hassle-free.
Support for Small Businesses: By partnering with different retailers, Lipa Later helps small businesses grow, which is great for the local economy.

Disadvantages

Higher Interest Rates: At 4.2% per month, the interest rate might be higher compared to other traditional loan options, which could add up quickly over time.
Shorter Repayment Terms: The maximum repayment period is 12 months, which might not be ideal for large or long-term purchases.
Limited Availability: The range of products depends on the retailers Lipa Later partners with, so if your desired store isn’t a partner, you might not be able to use the service for that purchase.

Lipa Later is a great option for those who need flexible financing for consumer goods, but the interest rate and the repayment terms are important factors to consider before committing.

Online application

DIB Bank Kenya offers interest-free Islamic loans (Murabaha) with amounts ranging up to KSh 6,000,000 and repayment terms as long as 72 months. Clients can choose from secured or unsecured loan options, with fixed profit rates based on their income and status with the bank.

Advantages

Flexible Repayment Plans: With repayment periods stretching up to 72 months, borrowers can choose a plan that fits their financial situation.
Clear and Predictable Terms: The profit rates are fixed, meaning there are no surprises—just straightforward, transparent terms.
Available to a Wide Range of Clients: Whether you’re employed or self-employed, these loans are accessible to a broad spectrum of customers.
Support for Small Businesses: DIB Bank offers financing for Local Purchase Orders (LPOs), which can help small and medium businesses grow and thrive.
Sharia-Compliant Products: All the bank’s financing products align with Islamic principles, ensuring they’re ethical and lawful.

Disadvantages

Loan Limitations: While KSh 6,000,000 is substantial, it might not be enough for larger businesses or projects that require more funding.
Required Documentation: Applicants must provide several documents, such as proof of income and bank statements, which could be a hassle for some.
Credit History Dependency: Loan approval and terms are often influenced by your credit history, which might limit access for individuals with less-than-perfect credit scores.

DIB Bank Kenya provides solid, ethical financing options with clear terms, but it’s important to consider the documentation process and loan limits before applying.

Online application

Stanbic Bank Kenya offers interest-free Islamic financing through their Murabaha product, which allows customers to buy goods on deferred payment terms. The bank purchases the goods and sells them to the customer at a marked-up price, with a profit margin that’s agreed upon by both parties, all in line with Islamic finance principles.

Advantages

Shariah Compliance: All transactions follow Islamic financial principles, ensuring that the financing is both ethical and legally sound.
Clear Terms: You’ll know exactly how much you’re paying for the goods, with no hidden fees or surprises. The bank’s profit margin is transparent from the beginning.
Flexible Repayment Terms: With the ability to choose your repayment period, you can structure your payments in a way that fits your financial situation.
Supports Local Businesses: The financing options help fund local purchases (LPOs), which can be a huge boost for small and medium-sized businesses.
Wide Availability: This financing product is open to both individual clients and employees of organizations, making it accessible to a wide range of customers.

Disadvantages

Loan Limitations: The maximum loan amount might not be sufficient for larger-scale projects or businesses looking to make big investments.
Documentation Required: As with most financial products, you’ll need to submit various documents, such as proof of income, which may be a hassle for some.
Credit History Dependency: The terms of the loan can depend on your credit history, so individuals with less-than-ideal credit may face challenges in securing financing.

Stanbic Bank Kenya offers a solid and ethical financing option that aligns well with Shariah principles, but it’s important to weigh the loan limits and documentation process before committing.

Online application

Aspira offers an interest-free loan service that allows you to purchase items with repayment options ranging from 3 to 12 months, and up to 24 months for furniture. The maximum loan amount is KSh 500,000, with an approval process that typically takes 24 hours, and a 10% deposit required for the first loan, with no deposit for subsequent loans.

Advantages

Easy Application: Applying for a loan is quick and straightforward with no complicated paperwork.
Variety of Products: Aspira partners with numerous retailers, so you have access to a wide range of products to choose from.
Flexible Repayment Terms: You can select repayment terms between 3 to 12 months, with an option to extend to 24 months for furniture, giving you plenty of flexibility.
No Hidden Fees: There are no hidden application or processing fees, so what you see is what you get.
Credit Protection: Aspira provides mandatory insurance for loans, covering events like death, disability, theft, or natural disasters, offering peace of mind.

Disadvantages

Loan Amount Limit: The maximum loan limit is KSh 500,000, which may not be enough for larger purchases or big-ticket items.
Initial Deposit Required: For the first loan, a 10% deposit is required, which could be a barrier for some customers.
Dependence on Credit History: Your credit history plays a significant role in determining your loan terms, so those with a poor credit history may find it difficult to qualify.

Aspira provides a convenient, interest-free way to purchase products on credit, but you should keep in mind the initial deposit requirement and ensure your credit history is in good standing before applying.

Online application

Salaam Microfinance Bank offers interest-free loans (Qard al-Hasan) based on mutual support, aimed at helping customers cover urgent financial needs. These loans are available without collateral or guarantors, making them accessible to a broad range of clients.

Advantages

Sharia-Compliant: All transactions adhere to Islamic financial principles, ensuring fairness and ethical lending practices.

No Interest Charges: Borrowers don’t have to worry about paying interest, which can significantly reduce the financial burden.

Straightforward Process: Applying for a loan is simple and easy, without unnecessary paperwork or complicated steps.

Flexible Repayment Options: You can choose repayment terms that fit your financial situation, offering more control over your payments.

Supports Small and Medium Enterprises: The bank also provides financing that helps local businesses grow by supporting their procurement needs.

Disadvantages

Limited Loan Amounts: The maximum loan amount may not be enough for larger-scale projects or businesses needing substantial funding.
Documentation Required: The need to provide several documents, such as proof of income, might be a hurdle for some people.
Credit History Considerations: Loan approval can be dependent on your credit history, which may restrict access for individuals with less-than-perfect credit records.

Salaam Microfinance Bank offers a reliable and ethical way to access interest-free loans, but you should consider the loan limits and the documentation process before applying.

Online application

Timiza by Absa Bank offers quick, interest-free loans through their mobile app or USSD (*848#), making it accessible even for people who don’t have a bank account. You can borrow anywhere between KSh 1,000 and KSh 150,000, and the loan comes with a one-time fee of 7.25% for 30 days, which includes 1.25% interest and a 5% facilitation fee.

Advantages

No Bank Account Needed: You don’t need to have an account with Absa to access the loans, making it an inclusive option for many Kenyans.
Fast Approval: The loan approval process is quick and seamless, allowing you to get the funds you need almost instantly.
Flexible Repayment Terms: You can choose from repayment periods of 30 days up to 12 months, giving you plenty of flexibility in managing your payments.
Business Support: Timiza is also a great option for small businesses, as it offers financing that can help you grow and expand.
Convenient Services: With Timiza, you can also pay bills, buy insurance, and top-up your account—all through the app or USSD.

Disadvantages

Withdrawal Fees: While you can withdraw your funds, it costs KSh 32 for each withdrawal to M-Pesa, which might be a bit inconvenient for some users.
No Discounts for Early Repayment: There’s no incentive like a discount for paying off your loan early, which might be frustrating for some customers who want to clear their debt faster.
Credit History Matters: Your loan terms are affected by your credit history, so people with lower credit scores might face challenges getting approved or accessing favorable terms.

Timiza offers a great, hassle-free way to get short-term financing, but it’s worth considering the withdrawal fees and the fact that early repayment isn’t rewarded.

Online application

M-Shwari, a partnership between NCBA and Safaricom, offers instant loans through M-Pesa ranging from KSh 100 to KSh 20,000. These loans come with a 3% interest rate per month and additional one-time fees: 7.5% for processing and 1.5% excise duty, which is deducted directly from the loan amount.

Advantages

No Bank Account Needed: M-Shwari is available to everyone, even if you don’t have an NCBA account, making it easy for more people to access loans.
Instant Loan Approval: You can get approved for a loan in minutes, which is a major advantage when you need cash urgently.
Flexible Repayment Options: You can choose repayment periods anywhere from 30 days to 12 months, which helps you fit the loan into your financial plans.
Convenience for Small Businesses: M-Shwari is also useful for small businesses that need quick financing, offering them a flexible solution for urgent needs.
Extra Services: Through the app or USSD, you can pay bills, buy insurance, and top up your account, making it a versatile tool.

Disadvantages

Withdrawal Fees: When you withdraw your loan to M-Pesa, you’ll be charged a KSh 32 fee, which can add up over time.
No Early Repayment Incentives: Unlike some other lenders, M-Shwari doesn’t offer any discounts or benefits for repaying your loan early, which might be frustrating for some borrowers.
Credit History Impact: The terms of your loan depend on your credit history, so people with poor credit may find it harder to get approved or might not receive favorable terms.

M-Shwari provides a fast and flexible way to access short-term loans, but the withdrawal fees and lack of early repayment discounts should be considered before applying.

Online application

Employer Salary Advance is a service where employers allow their employees to access a portion of their salary before the official payday. Employees can typically borrow up to 50% of their monthly salary, and the amount is repaid on the next payday.

Advantages

No Third-Party Lenders: With this service, employees don’t have to turn to external lenders, which helps avoid high-interest loans and debt traps.
Easy Access: The process is seamless as the loan is provided directly by the employer, making it easier for employees to access their funds.
Clear Terms: There are no hidden fees or complicated terms, making it a transparent service for employees.
Flexibility: The service offers flexibility when urgent cash is needed, helping employees manage financial emergencies.
Employee Well-being: By giving employees access to their earned wages, this service can reduce financial stress, which could lead to improved work performance and satisfaction.

Disadvantages

Limited Loan Amount: The amount available to borrow is capped at a percentage of the salary, which might not be enough to cover larger expenses.
Frequent Use Could Indicate Financial Stress: Relying on salary advances often might suggest that an employee is struggling with their finances, which could become a concern.
Not Available to All Employees: Only employees whose employers offer this service can benefit from it, meaning it’s not accessible to everyone.

Employer Salary Advance is a practical solution for handling financial emergencies, but it’s important to avoid overusing it, as it might create financial dependency.

Online application

SACCO Dividends Advance is a service where members of SACCO can access part of their expected dividends before they are officially paid out. You can borrow up to 70% of the projected dividend amount, with repayment due once the dividends are officially distributed.

Advantages

Easy Access: SACCO members can get quick access to funds before the dividend payout, helping to cover urgent financial needs.
Flexible Repayment: The repayment is synchronized with the dividend distribution schedule, making it easier for members to repay the loan.
Transparency: The process of getting and repaying the advance is straightforward, with no hidden fees or complex terms.
Financial Support: It helps members manage their finances effectively until they receive their dividends, reducing the pressure of financial gaps.
Builds Trust: By offering this service, SACCO strengthens the trust of its members, encouraging continued participation and engagement.

Disadvantages

Limited Amount: The loan is capped at 70% of the expected dividends, which might not be enough for larger expenses.
Dependence on Dividend Payment: Repayment depends on the timely release of dividends, and if there are delays, it can affect the repayment process.
Restricted Use of Funds: Members can only access the advance based on the upcoming dividends, so flexibility in using the funds may be limited.

SACCO Dividends Advance offers a useful financial option for SACCO members, but it’s essential to consider the limitations on the advance amount and the dependence on timely dividend payouts.

Online application

Family Bank offers its customers the option to access up to 50% of their expected salary before payday through the Employer Salary Advance program. This service is available via mobile app or USSD, allowing quick access to funds without the need to visit a bank branch.

Advantages

Instant Access to Funds: The advance can be accessed immediately through the mobile app or USSD, which is especially helpful during financial emergencies.
Convenient, No Branch Visits: The whole process is done remotely, meaning there’s no need to take time off work or visit a branch.
Automatic Repayment: The loan is automatically repaid with the next paycheck, making it a hassle-free option for those with tight schedules.
No Hidden Fees: There are no hidden fees or complicated terms, so you know exactly what you’re getting into when you apply for the advance.
Supports Financial Flexibility: It helps employees manage unexpected expenses without resorting to high-interest loans or credit cards.

Disadvantages

Advance Limitations: The amount available to borrow is capped at 50% of the net salary, which might not be enough for larger financial needs.
Availability Depends on Employer: This service is only available to employees whose employers have partnered with Family Bank, limiting its reach.
Mobile Access Required: To access the service, you need a mobile device that supports the app or USSD, which may not be convenient for everyone.

Family Bank’s Employer Salary Advance service is a solid option for quick financial relief, but you should consider the limited loan amount and employer-dependent availability before deciding.

Lender	Loan Amounts (KES)	Loan Terms	Interest Rate	How the “Interest-Free” Model Works
Zenka	500 – 20,000	61 days	0% (First Loan Only)	Promotional Offer: The very first loan is 100% free of interest if repaid on time. Standard rates apply thereafter.
Gulf African Bank	Varies	Varies	Sharia Compliant	Islamic Bank: Offers financing based on Sharia principles (e.g., Murabaha). No interest (“Riba”) is charged.
First Community Bank (FCB)	Varies	Varies	Sharia Compliant	Islamic Bank: All products are interest-free and structured according to Islamic law.
KCB (Sahal Banking)	Varies	Varies	Sharia Compliant	Islamic Window: KCB’s Sharia-compliant division offers interest-free banking and financing products.
Absa Bank (La Riba)	Varies	Varies	Sharia Compliant	Islamic Window: Absa’s dedicated portal for Sharia-compliant, interest-free financial solutions.
Lipa Later	Up to 500,000	Up to 12 months	0% for short terms	Buy Now, Pay Later (BNPL): Offers 0% interest if you pay back within the first 30-90 days at partner stores.
DIB Bank Kenya	Varies	Varies	Sharia Compliant	Islamic Bank: A subsidiary of Dubai Islamic Bank, all financing is interest-free.
Stanbic Bank (Islamic Banking)	Varies	Varies	Sharia Compliant	Islamic Window: Provides Sharia-compliant financing options for personal and business needs.
Aspira	Up to 500,000	Up to 12 months	Often 0% promotions	Buy Now, Pay Later (BNPL): Partners with merchants to offer 0% financing on products like electronics and furniture.
Salaam Microfinance Bank	Varies	Varies	Sharia Compliant	A microfinance bank operating purely on Islamic finance principles.
Timiza (Absa)	Varies	30 days	Fee-based, not interest	Some might consider its fixed facilitation fee model different from traditional interest calculation. The cost is a flat fee.
M-Shwari	1,000 – 1,000,000	30 days	Fee-based, not interest	Charges a 9% “facilitation fee,” which is a one-time charge, not compounding interest.
Employer Salary Advance	Varies (part of salary)	30 days	Often 0%	Many companies offer their employees interest-free salary advances as a benefit.
SACCO Dividends Advance	Part of expected dividends	Until dividends are paid	Often 0% or very low	Many SACCOs advance members their expected dividends interest-free or at a very low rate.
Family & Friends	Varies	Flexible	0%	The most common form of interest-free lending, based on personal trust.