Why our partner refuses to deduct from your disbursement
The math is simple. The principle is simpler. Here is why we only work with a lender that holds this line.
When a Kenyan borrower is approved for KSh 1,000,000 and only KSh 850,000 lands in their account, something has gone quietly wrong. The lender will call it 'fees'. The borrower will call it a betrayal. Both are right. The conversation has been the same in every market we have looked at, from Westlands to Kisumu to Eldoret: the headline number is one thing, the wired number is another, and the difference is rarely explained until the day the cash is supposed to arrive.
When we vetted micro-finance institutions to settle on a single Cashlog partner, we drew exactly one non-negotiable line in the sand: the qualified amount is the qualified amount. Our partner's 5% origination fee is added to the loan principal and never skimmed off the top. It is more honest, and it is more expensive for them to operate that way, because they have to fund the whole disbursement up front and recover the fee through the amortisation schedule rather than capturing it on day one. They accepted that trade because they knew it would compound into trust.
The result is a slightly higher monthly repayment in exchange for a disbursement you can actually plan around. If you needed KSh 1M to import equipment, our partner sends you KSh 1M. The 5% sits on top, baked into the schedule, paid back gradually. You never wake up the next morning short by a six-figure sum that someone else decided you didn't really need.
We have watched borrowers spend weeks rebuilding budgets after a surprise deduction blew through their procurement plan. A 12% haircut on a working-capital loan does not just cost 12%. It costs the supplier discount you were going to capture, the early-pay rebate you had negotiated, the customer who would not wait, and the staff hours spent rerouting funds. Sometimes it costs the deal entirely.
Holding the line on full disbursement also forces honesty earlier in the process. Our partner cannot quietly inflate an offer to win a customer and then claw it back at payout. The number you sign is the number you receive. That single discipline filters out the games the rest of the industry plays — the soft 'admin fee', the 'insurance buffer', the 'tracker deposit' that somehow never gets refunded, the 'first-month interest reserve' that exists nowhere in the loan agreement.
If you ever see a competitor's term sheet with phrases like 'net of charges', 'service fee withheld', 'effective amount disbursed', or 'first instalment retained', read it three times before signing. That is almost always where 8 to 15% of your loan goes to die. Ask the loan officer to show you, in writing, the exact shilling figure that will hit your account. If they cannot, or if the answer is different from the headline approval, walk away.
The other consequence of full disbursement is that it changes who applies in the first place. When borrowers know they will receive every shilling, they ask for what they actually need rather than padding the application to absorb expected deductions. That makes underwriting cleaner, default rates lower, and the whole product cheaper to run. We have watched our partner's average ticket size drop slightly while approval rates climbed — the textbook signature of a market correcting itself.
There is a quieter benefit too. Borrowers who receive their full amount are far more likely to deploy it well. We track this in our concierge notes: the SMEs who get KSh 1M intact tend to spend it on the single planned deployment they came in for. The ones who get KSh 850K and have to scramble for the rest tend to mix loan funds with other cash, lose track of what is going where, and end up with a thinner result and a heavier repayment. Full disbursement is, in that sense, a discipline tool.
We will never apologise for the 5%. It is a real fee for real work — valuation, NTSA filing, tracker fitting, underwriting, disbursement, and a year or more of servicing. What we will defend with our lives is where it sits. On top of the loan. Visible. Amortised. Never carved out of the money you were promised.
If you are comparing offers right now, ask each lender three questions. One: what exact amount will land in my account? Two: where in the loan agreement is the fee disclosed and how is it calculated? Three: if I clear early, is the unamortised portion of the fee refundable? Our partner answers all three the same way every time. Most others stutter on the third.