Get breaking business news on WhatsApp
Faulu Microfinance Bank is moving its lending away from payslip-backed retail loans towards traders and small businesses, offering asset finance, working capital and trade finance assessed on a business’s cash flow rather than land or vehicle collateral, Capital FM reported on October 30, 2026. The bank said the shift has been under way for two years.
How Faulu SME loans now work
A merchant platform to pull income together
Many traders get paid through several paybills, till numbers and cash, which makes it hard to show a lender their real income. Faulu has introduced a merchant platform where businesses bring those revenue streams into one portal. The bank then uses that transaction data to judge whether a business can repay, instead of relying mainly on physical security.
Trade finance secured on the goods
Businesses that want to import or buy stock but lack upfront cash can get trade finance secured against the goods being bought.
Repayments matched to the business cycle
Gloria Kositany, Faulu’s senior manager for marketing and communications, said loans should follow how a business earns. She gave schools as an example: they collect most fees during term, so fixed monthly repayments can strain them. Landlords can get top-up credit through rental income channels to pay for repairs.
What Faulu is offering, in summary
| Product | What it is for | Security |
|---|---|---|
| Working capital | Stock, wages, day-to-day costs | Cash flow seen on the merchant platform |
| Asset finance | Equipment and vehicles | The asset being financed |
| Trade finance | Imports and bulk purchases | The goods being acquired |
| Rental top-ups | Repairs for property owners | Rental income |
The bank did not publish interest rates or loan limits for the new products. Ask for the annual percentage rate and all fees in writing before you sign, and compare with other lenders.
Why it matters
Lack of collateral is one of the main reasons small Kenyan businesses are turned down by banks, pushing many to expensive digital loans or chamas. Cash-flow lending, where the lender looks at M-Pesa and till data, is becoming common: banks and fintechs increasingly price loans from transaction history. Faulu’s move puts a regulated microfinance bank in that space.
Faulu, part of Old Mutual, has 24 branches and about 150 agents, and held a 39.7% share of Kenya’s microfinance banking market last year, according to the bank. For another microfinance option, see our guide to Umba Microfinance Bank branches and products.
How to prepare if you want a cash-flow loan
- Route as much business income as possible through one till or paybill so your sales history is visible.
- Keep business and personal money separate.
- Have your KRA PIN, business registration and permit ready.
- Match the loan term to your cycle: seasonal businesses should ask for flexible or term-based repayments.
FAQ
Does Faulu give business loans without a title deed?
Faulu says it now assesses many SME loans on cash flow from its merchant platform, and secures trade finance against the goods bought, rather than relying mainly on land or vehicles.
How many branches does Faulu have?
24 branches and about 150 agents, according to the bank.
Updated October 31, 2026.
Related: Best Bank for Chamas in Kenya 2026: Co-op Mshiriki vs Family Bank vs KCB Chama
Prefer WhatsApp? Follow Business Radar on WhatsApp
Weekly, free. We only use your email for this newsletter and you can unsubscribe in one click. Privacy policy.
