What are “check off” loans? These are loans made available to employees whose employers have signed an agreement with a lending institution to allow their employees to take loans. The employer will then process and remit the loan repayments directly to the lending institution.
Benefits of check off loans:
- These loans typically do not require any security
- Usually processed very quickly
- In the case of banks, they are one of the few ways to get a loan from a bank without opening an account with them
- In some cases the repayment terms are more flexible than most other loan types
What is in it for the employer? When an employer offers this type of loan to employees, it is a benefit, or a perk, for employees. Basically, like in any other business, employers only give bonuses if it will benefit the employer. Employers often use facilities such as “check off loans” to attract new recruits or motivate current staff to stay with the employer. It is purely a business decision.
SOURCE: KENYA LOANS