The COVID-19 pandemic has taken its toll on this already indebted country. Many South Africans are making use of credit to make ends meet, however, some of them do not qualify for traditional personal loans due to bad credit score or inconsistent financial behaviours. As a result, the popularity of alternative lenders like Mpowa Finance (mpowafin.co.za) is on the rise. These FinTech Companies are well known for helping nationals cover the gap between paydays.
Credit in South Africa
South Africans are relying on more credit to make it to the end of the month, says the latest report by TransUnion. The pandemic has been putting pressure on consumers’ personal finances for some time now, and many nationals are desperately trying to find reliable alternative creditors that can help them make it to the end of the month. Mpowa Finance is one of the options available.
Mpowa Finance: Loan Terms
Founded in 2011, this registered credit provider offers some of the lowest interest rates in the industry. However, their online reviews are just average. New customers qualify for quick loans from R500 to R2,500 based on their individual affordability. The repayment terms range from 5 to 30 days.
Mpowa Finance is very transparent when it comes to fees. The interest rate for the first Mpowa loan in a calendar year is 5% per month (0.17% per day, 60% p.a). For subsequent loans in the same calendar year, the company charges an interest of 3% per month.
Clients who take out a Mpowa loan must also pay an initiation fee of R165 + VAT on the borrowed amount up to R1000, and a 10% thereafter. There is also a maximum monthly service fee of R60. Customers who default on their payments will be contacted to agree new loan terms and will be charged an interest of 3% per month. The loan amount will be repaid in full on their payday by debit order. Clients may log in and reapply for a new loan each month once the previous one has been repaid.
Mpowa Loans: Application Process
Their website is created to allow customers to create a profile within a minute. Once registered, clients only need to follow three simple steps to submit their loan request. After selecting the amount they need to borrow and the repayment terms, all they need to do is sign the contract delivered to their email and upload their latest bank statements or payslips.
Mpowa Finance calls the customers for a voice recording of their contract details. The whole process, however, generally takes less than 8 minutes. If their application is submitted before 3pm, the cash will hit the clients’ accounts before 5PM (upon approval).
Am I Eligible for a Mpowa Loan?
In order to qualify for one of Mpowa Finance’s products, customers need to meet the following criteria:
- Be 18 years or older
- Have a South African ID
- Have a valid South African bank account
- Be permanently employed
The company will also run an affordability check online. Mpowa Finance will take the client’s income, expenses, credit score, and payment behaviour into consideration.
Mpowa Finance: Reviews
Mpowa Finance has 212 reviews on HelloPeter, and the average rating is 3.7 out of 5. Most recent feedback is of a positive nature, so compliments are far more prominent than complaints. The company, unfortunately, is not featured on Google.
Pros and Cons of Payday Loans
There are both advantages and disadvantages to choosing a short-term loan over traditional credit products. Although companies like Mpowa Finance can definitely help with financial emergencies, payday loans often entail high interest rates, especially for those customers with poor credit score.
The fees and penalties are sure to drive up the cost of borrowing, and defaulting on your payment will ruin your credit profile. Therefore, these types of loans should always be your last resort.
Mpowa Finance: Contact
If you are interested in the products offered by Mpowa Finance or need further information on their loans, do not hesitate to get in touch. You can contact them through their website or give them a call on 083 736 0165. They will be able to help you if you live anywhere within the borders of the Republic of South Africa.