You often need more financial options as a Mama Mboga or any casual market trader. As a result, most of these market traders result to shylocks and other high-interest loans that end up crippling their businesses. For this reason, KCB Bank launched the Soko/ Market loan; to bridge this financial gap.
Soko/ Market loan is a financial product by KCB Bank Kenya whose target is market traders. The loan financially boosts small-scale entrepreneurs who aspire to invest and scale their businesses.
I’ll take you through everything you need about the Soko/ Market loan program in this article. We’ll cover the loan’s features, eligibility criteria, how to apply, and more.
Overview of KCB Soko/ Market Loan
Soko/ Market Loan is a specialised loan program designed to provide financial assistance to small businesses operating within the Soko ecosystem. Soko Market is a financial product from KCB Bank that connects small-scale entrepreneurs.
“Soko” originates in Swahili, spoken widely in East Africa. In Swahili, “Soko” means “market.” By incorporating this term into the loan name, KCB Bank establishes a direct connection to the marketplace the loan serves. It reflects its focus on supporting businesses operating within the marketplace context.
While the term Soko may bring some ideological limits, “Market” represents the broader concept of commerce, trade, and business transactions. It represents any business that sells goods and services in various marketplaces. By including “Market” in the name, KCB Bank emphasises its role in facilitating financial support for businesses engaged in market-based activities.
Soko/ Market Loan is a strategic initiative that supports and empowers small businesses to grow and thrive. Recognising the challenges these often unrecognised businesses face in accessing traditional financing options, Soko/ Market Loan offers an alternative yet personalised solution.
Benefits/ Features of KCB Soko/ Market Loan
Soko/ market loans have enormous benefits associated with their features. Some of these benefits include:
No. 1: Increased Financial Opportunities for Small Businesses
Soko Market Loan opens new financial opportunities for Mama Mboga and Boda Boda businesses. These ventures need more access to traditional financing options. Soko Loan provides an accessible and niche-tailored loan of up to Kes 100,000, enabling entrepreneurs to grow their businesses.
With this increased financial support, Mama Mbogas can invest in product development, expand operations, automate repetitive tasks, and explore new market opportunities. The Loan bridges the financing gap, allowing small-scale businesses to unlock their full potential and thrive in competitive market environments.
No. 2: Flexibility in Loan Terms and Repayment Options
The degree of flexibility in loan terms and repayment options that the Soko/ Market loan offers accommodates small businesses’ unique financial circumstances. Mama Mbogas can choose loan amounts and repayment terms that align with their funding needs.
The loan has a repayment period of up to 12 months, enabling loanees to repay without straining their business objectives. In addition, the flexibility allows businesses to manage their cash flow effectively and repay the loan to suit their financial capabilities. As a result, this reduces the burden and stress associated with loan repayment.
No. 3: Support for Sustainable and Ethical Business Practices
One distinguishing feature of Soko Market Loan is its commitment to training ambitious loanees and enhancing their business practices. The loan program provides free training to traders and market officials to improve their skills in managing and scaling their businesses.
Requirements for Obtaining a KCB Soko/ Market Loan
Any Mama Mboga or market trader can apply for a KCB Soko/ Market loan if they meet the requirements. Let’s break it down.
- Six months’ account statement (Other Bank or M-PESA statement allowed)
- Application form to be signed by market association leaders confirming applicant’s membership
- Security in the form of household or business assets
- Guarantee by three other market traders
- Undertaking by market association leaders to inform the bank in case of changes in trading ground/stall ownership.
- Registration Certificate: If the applicant is under a registered market association, the bank may request that they provide the certificate.
- Credit History: Even though Soko/ Market Loan is accessible to businesses with limited credit history, a positive credit record can strengthen the application. Better, the loan program considers alternative credit assessment methods. Most of these scores focus on the business’s performance and potential rather than relying solely on traditional credit scores.
The bank may request other relevant details, including your ID number, KRA Pin, etc. In the section below, I interested applicants to visit the bank after researching and assessing their financial capabilities. That way, the bank agent can guide you on the specific documents you need.
A Guide to Applying for the KCB Soko/ Market Loan
Applying for the Soko/ Market loan involves seven steps, although this often changes depending on the type of loan. I’ve prepared a general but comprehensive guide on the KCB loan application process that you can check out.
Step 1: Research and Understand the Loan Program
You’ve already started the Soko/ Market loan application process as you read this. This stage involves familiarising yourself with the program. Additional sources of research on the loan include the KCB Bank website. By the end of this stage, you should have an idea of the loan terms and conditions, eligibility criteria, and loan offerings.
Step 2: Gather Required Documents
Prepare the necessary documents, such as certificates, financial statements, bank statements, and any other documentation specified by the loan program.
Step 3: Visit the Bank and Complete the Application Form
Once you visit the bank branch, the agent will offer you the Soko/ Market loan application form. This form captures all requested information from personal details, guarantor details, loan amount, intended use of funds, etc.
Step 4: Wait for Evaluation and Approval
After submitting your application, the bank will review and evaluate your application. This involves a comprehensive assessment of your business, creditworthiness, and other internal factors.
Step 5: Loan Disbursement and Agreement
If the bank approves your application, the bank agent will walk you through the loan agreement outlining the terms, conditions, interest rates, repayment schedule, and other relevant information. Once you review the agreement, sign it if you agree with it.
Utilise the Loan Funds and Repay the Loan: Utilize the loan funds, and adhere to the repayment schedule. This is a chance to build a positive credit score.
Limitations of the KCB Soko/ Market Loan Program
While Soko/ Market Loan offers valuable benefits, I must acknowledge their limitations. Some of the limitations include:
No. 1: Low Loan Amount Restrictions
The Soko/ Market Loan program has a low maximum loan amount of Kes One million. This may restrict Mama Mbogas with substantial financing needs from fully meeting their requirements through this financing option alone.
No. 2: Higher Interest Rates
Despite the loan targeting low-revenue businesses, the Soko/ Market Loan program is the same late as other KCB Bank loans. This can be challenging for most Mama Mbogas and increase the overall borrowing costs.
Soko/ Market Loan is pivotal in supporting small businesses within market-based ecosystems. It provides increased financial opportunities and flexibility in loan repayment terms. The loan empowers entrepreneurs to scale their businesses by bridging the financing gap.
However, it’s important to acknowledge the potential limitations of the Soko Market Loan, such as the low maximum loan limit. If you’re looking for a loan option with a higher maximum limit, consider reading our guide to the KCB Boresha Biashara loan.
I’d love to read your thoughts and experiences with Soko/ Market loans; please share them in the comments. Additionally, I like this article if you loved reading it.