How to Get a Loan from a Shylock in Kenya? Essential Guide for Borrowers

Updated on May 3, 2024: Added detailed information about Shylocks’ operations, risks, and interest rates in Kenya, along with alternative options and essential advice for borrowers’ financial empowerment and informed decision-making.

Have you ever wondered how to go about to acquire a loan from a Shylock in Kenya? In today’s article, we will look at how to secure a loan from a Shylock.

Who Are Shylocks?

Shylocks are individuals or entities that provide loans to borrowers at high-interest rates, often without requiring collateral or a credit history. They operate outside the regulated financial sector and are not subject to the same laws and regulations as banks and licensed lenders.

In Kenya, modern-day Shylocks have come in many forms and sizes. We have those that have ridden on the wave of offering mobile loans while we have those others that have stuck to the old ways of doing things.

Why Borrow From A Shylock?

As earlier mentioned, Shylocks lend money using very high-interest rates. As a person of a rational mind, you might want to avoid acquiring a loan from these types of lenders but at times it may be hard.

Some of us have families that we can no longer sustain because of either being let go from our places of work or even losing our businesses. Therefore, at times it may become necessary to acquire a loan from a shylock.

For some of us, however, we just enjoy living beyond our means and acquiring loans from Shylocks is the only other way to survive until the next paycheck. This particular group of individuals may have already borrowed from every other available online lending platform and failed to repay and hence resulting in them being blacklisted.

Read More: Signs you are living beyond your means

How Do Shylocks Work?

  1. High-Interest Rates: Shylocks typically charge significantly higher interest rates compared to banks and formal lending institutions. These rates can range from 10% to 30% per month, leading to substantial repayment amounts.
  2. Short-Term Loans: Loans from shylocks are usually short-term, with repayment periods ranging from a few weeks to a few months. Borrowers must repay the principal amount along with the accrued interest within the specified timeframe.
  3. No Collateral Required: Unlike traditional lenders, shylocks may not require collateral or a credit history for loan approval. This accessibility makes them attractive to individuals who may not qualify for bank loans.
  4. Flexible Terms: Shylocks may offer flexible terms and quick approval processes, making them a convenient option for borrowers in urgent need of funds.

Key Requirements to Secure a Loan From a Shylock

1. Present security

If it’s your first time or even the Shylock’s money lending policy, you may be required to present something to act as security. If and when you are unable to repay within the agreed period, the Shylock takes procession of the said item. It is worth noting that often, most people use their phones, laptops, woofers, Television sets, car log books among others.

However, if the Shylock trusts you, you may not be required to present security.

2. Present a copy of your ID

Identification documents are very important. As a result, you may be required to present a copy of your ID to act as evidence that you did this willingly.

3. Signing an agreement

Gone are the days when verbal agreement was sufficient. At the moment, most Shylocks will require you to sign a written document allowing them to take possession of the secured item in case you are unable to pay.

4. Know a Shylock or Know someone who knows one

Shylock business in Kenya is not legal. Therefore, most business me operate in hiding. One has to, therefore, know a Shylock or just know someone who knows one to be able to access their services. Moreover, Knowing a shylock personally increases your chances of getting a better deal than everyone else.

Risks of Borrowing from Shylocks

  1. High-Interest Costs: The main risk of borrowing from shylocks is the high cost of interest. Borrowers can end up paying significantly more than the borrowed amount, leading to a cycle of debt if they struggle to make timely repayments.
  2. Lack of Regulation: Shylocks operate in an unregulated environment, making it difficult for borrowers to seek recourse in case of unfair practices or disputes.
  3. Debt Traps: Due to the short-term nature of loans and high-interest rates, borrowers may find themselves trapped in a cycle of borrowing to repay previous loans, leading to financial instability.
  4. Legal Consequences: Defaulting on loans from shylocks can result in aggressive debt collection practices, including harassment, threats, and legal action.

Shylock Interest Rates in Kenya

Shylocks in Kenya typically charge high-interest rates compared to formal lenders. Borrowers should be aware of these rates before entering into any loan agreements with shylocks. Interest rates can vary depending on factors such as the amount borrowed, the repayment period, and the individual shylock’s terms.

Loan Amount (Ksh) Repayment Period Interest Rate (%) Total Repayment (Ksh)
5,000 1 month 20 6,000
10,000 2 months 25 12,500
20,000 3 months 30 26,000
50,000 4 months 35 67,500
100,000 6 months 40 140,000

Note: The above table provides illustrative examples of interest rates charged by shylocks in Kenya. Actual rates may vary, and borrowers are advised to carefully review and negotiate terms before taking out a loan.

Alternatives to Shylocks

While shylocks provide an option for accessing immediate funds, borrowers should explore alternatives to mitigate risks:

  1. Microfinance Institutions: Consider reputable microfinance institutions that offer loans at lower interest rates and provide financial education and support.
  2. Savings and Credit Cooperatives (SACCOs): Joining a SACCO allows access to affordable credit, savings products, and financial advisory services.
  3. Peer-to-Peer Lending Platforms: Explore online peer-to-peer lending platforms that connect borrowers with individual investors, offering competitive interest rates and transparent terms.
  4. Government Support Programs: Investigate government-backed loan programs and initiatives designed to support small businesses and individuals with access to credit.

Frequently Asked Questions

How do I apply for a loan from a shylock in Kenya?

To apply for a loan from a shylock in Kenya, you typically need to contact them directly or visit their office. They will assess your loan request based on factors such as the amount you need, repayment terms, and your ability to repay the loan.

How do I qualify for a loan from a Shylock?

Qualifying for a loan from a Shylock usually involves demonstrating the ability to repay the loan, often through collateral such as assets or property. Shylocks may also consider factors such as income, employment status, and credit history when assessing a borrower’s eligibility for a loan.

What are the interest rates charged by shylocks in Kenya?

Interest rates charged by shylocks in Kenya can vary widely, ranging from 10% to 30% or more per month. It’s crucial to understand the interest rates and total repayment amounts before agreeing to a loan from a shylock.

What are the risks of borrowing from shylocks in Kenya?

Borrowing from shylocks in Kenya carries several risks, including high-interest costs, aggressive debt collection practices, and potential legal consequences for defaulting on loans. Borrowers should carefully consider these risks before taking out a loan from a shylock.

How can I protect myself when borrowing from a shylock in Kenya?

To protect yourself when borrowing from a shylock in Kenya, it’s essential to read and understand the loan agreement thoroughly. Negotiate terms if possible, avoid borrowing more than you can repay, and seek legal advice if you encounter issues with the loan or debt collection practices.

What should I do if I am unable to repay a loan from a shylock in Kenya?

If you are unable to repay a loan from a shylock in Kenya, communicate with them promptly to discuss repayment options or possible extensions. Avoid ignoring communication or defaulting on the loan without seeking resolution, as this can lead to further complications.


While shylocks may provide a quick solution to financial needs, borrowers should carefully assess the risks and explore alternative sources of credit before engaging with informal moneylenders. Understanding the terms, costs, and potential consequences of borrowing from shylocks is essential to making informed financial decisions and avoiding debt traps.

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Mary is one of the leading writers on Urban Kenyans. She is knowledgable on matters Kenya and has been able to educate many Kenyans on this platform.

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