6 Reasons Why No Kenyan Bank Will Give You a Loan

Here are the top 5 reasons why no bank will give you a loan in Kenya. You will keep getting rejected until you make these necessary changes.

Carson O.
7 Min Read

When you set out to your local bank for a loan for whatever reason, a few factors will be assessed to determine whether you can be loaned the money. When you fail to satisfy all bank requirements for the loan, your application will always be rejected.

If you have been through rejection and failed to pinpoint where the problem is, you will keep getting rejected until you make the necessary changes.

This article, therefore, aims to educate you on how to satisfy all traditional bank requirements so that your loan application is approved in a matter of hours or days. Be alert, as I will also point out the major pitfalls that guarantee the rejection of loan applications in Kenya.

Let’s dive in;

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You have no business plan

A business plan is an official document that provides readers with an overview of a company and the strategies a company will employ in the future to propel the business into success.

This document helps the company, its owner, and employees focus on a specific goal or target. It helps maintain productivity, thus making the entrepreneurial venture worthwhile.

When a company does not have a business plan to present to a bank when seeking funding, this traditional lender automatically assumes that the entrepreneur is not severe and has not planned how to repay the loan duly.

Banks are in the business of acquiring securities. Lending money can never be based on faith but rather on evidence that the loan will be repaid with interest. With this in mind, you now understand why a bank almost instantly rejects your loan approval.

Poor credit score and report

The Credit Reference Bureau of Kenya, CRB, records every Kenyan’s credit report and score.

Whenever you want to borrow money from a traditional bank or digital lender, they first access your credit score from CRB, and if your score is below 600, your chances of being approved for the loan diminish.

You see, a credit score is a 3-digit number that ranges from 300 – 850, lowest to highest respectively. If you pay your debts on time and have no pending obligations, you will have a high credit score.

However, if you tend to neglect your pending bills and loans, your score will be on the lower side. This will signal to anyone, including the banks, that you will probably fail to pay them back. For this reason, your loan application will be rejected automatically.

So, how can you check and improve your credit score report?

In this article, I have laid out the necessary steps to check your credit score and how to improve it so that you are accepted when you apply for a loan.

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Nevertheless, here is a summary of how to improve your CRB credit score and report;

  • Check your reports for accuracy – Analyze your credit report for errors and mistakes. Correct them!
  • Make sure you pay your bills on time – Water, electricity, subscriptions, etc.,
  • Be loyal to your credit card provider.
  • As described in this article, reduce the total number of loans you have by consolidating them.

Lack of a good reason to borrow the loan

When you approach your bank for a loan to spend on a vacation on the coast, your chances of approval will be lower than those of someone who seeks the loan due to a medical emergency.

Banks assess whether or not your reason for borrowing is logical. If not, you will go back home with nothing but your empty pockets.

Unverified sources of income/revenue

When you engage in shady business deals, fail to pay taxes, etc., banks will fail to verify your sources of income. This means they will not be sure how you intend to repay the loan.

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This goes further than just illegal business deals. When you don’t have a stable cash flow, your chances of being approved for a loan are low.

Does that mean that you cannot access a loan if you are not employed?


Inadequate collateral

When you have no income or salary, your local bank will look for collateral. This is a physical or digital possession that you own that will be used as security for the loan.

With collateral, your loan application will be approved as soon as possible, and if you fail to pay the loan on time, the property will be seized and sold to recover the money you owe the bank.

Therefore, this option is quite risky, and you should critically weigh your options before settling on this.

Your loan application will be rejected when you have no income or collateral.


Despite the strict guidelines the traditional banking system sets, digital lenders have tried to solve this problem. In Kenya, loan apps such as Zenka, Tala, Okash, etc., provide short-term loans that don’t need a good CRB score or any collateral.

Check out the top loan apps in Kenya, their interest rates, and policies here. We’ve also included how to apply for the loans.

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Above are the top reasons why no bank in Kenya will give you a loan. Heed the advice!

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I am a multi-faceted professional with a strong foundation in Business and Finance, honed since 2020. Additionally, I possess a deep passion for automobiles, serving as an avid car enthusiast. In parallel to my diverse interests, I am also a dedicated student pursuing a career in the medical field.
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