Types of Loans Available to Civil Servants in Kenya

Simon Mwangi

In today’s article, we will discuss the direct loans for civil servants offered by the government or its institutions.

There are three significant loans that the government of Kenya offers to its employees. These loans include Higher education loans, Mortgage loans, and car loans.

Loans for Civil Servants In Kenya

Here is a list of the different loans on offer to civil servants in Kenya:

1. Higher Education Loans

Government employees in Kenya can access education loans from the higher education loans board in Kenya.

Through this loan, one can pursue their master’s/post-graduate education and other professional certifications.

Loan features

  • Up to KES 500,000 available
  • The repayment period is 72 months.
  • The interest rate is at 5% on reducing balance.

Eligibility for this loan

To be eligible for this loan, one has to be employed in the following ministries.

  • County governments
  • Parliamentary service commission
  • National police service
  • Government ministries
  • Kenya Prisons

In addition to meeting the eligibility criteria, one has to present the following documents during the application.

  • Employer recommendation letter
  • Admission letter from a recognized university
  • Certified copies of ID and KRA pin, as well as two recent passport-size photos
  • certified copies of IDs of two guarantors who must be civil servants
  • Copies of your most recent three month’s payslip

Once you are satisfied that you have all the documents ready, submit your application through the HELB website.

2. Mortgage Loans

A civil servant in Kenya is eligible for a mortgage loan in Kenya. This is possible through the civil servant housing scheme fund.

This fund was founded in 2014 and has refined its operations over time, offering the best affordable loans to civil servants.

The Features of civil servants’ mortgage loans are:

  • One can borrow between 4 million to 40 million depending on the job group of the civil servant.
  • The interest rate on reducing balance is as low as 5% per annum.
  • The loan repayment period is up to 20 years.
  • This loan is repaid using the check-off system to reduce administration costs.
  • Only a 10% downpayment is required for you to receive 90% financing

KCB and the housing finance corporation are managing the current mortgage scheme.

3. Car Loans

Introduced in 2015, these cheap car loans are quite affordable. A civil servant can access between KES 600,000 to KES 10,000,000.

It’s worth noting that the higher your job group, the higher the amount of loan you will receive.

The interest loan applicable to this loan is 3% per annum, which is way below the banks’ asset financing loans.

A good employer always tries to motivate their employees. This is what the government of Kenya achieves through these loans.

Loans for Civil Servants in Kenya Conclusion

The government of Kenya tries its best to provide cheap loans for government employees, as discussed above.

It is worth noting that other microfinance and banking institutions also offer loans to civil servants.

Such institutions include Faulu Bank, Equity Bank as well as KCB Bank.

Cases of civil servants losing their money to serving loans they did not take are very common these days. One such point has been with platinum credit loans.

Platinum credit is notorious for erroneously making civil servants’ service loans they didn’t apply for.

Based on this, civil servants need to avoid taking loans from just any source.

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As a freelance writer with a background in banking and accounting, Simon has the financial know-how to produce quality content on various topics. His experience gives him a strong foundation in understanding complex financial concepts and communicating them in an easy-to-understand way.
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