Tough Times Ahead For Borrowers as Mobile Loan Apps Hit Back

Image courtesy Tala

You’ve probably already noticed a delay or outright denial when you try to request for a loan from your favourite mobile digital lender- don’t worry it’s not just you. Digital lenders who operate in the country have announced action to cut instant loans. This decision was made shortly after an order was issued from Central Bank of Kenya on blacklisting of defaulters.

Digital Lenders Association of Kenya (DLAK) clarified that the loan granting process will become lengthy from now on meaning a lot more people will even have to be denied. DLAK says that mobile lenders will be forced to ask clients to send them bank and M-PESA statements in order to validate information on their source and level of income.

The association reckons that the directive to stop lenders from blacklisting loan defaulters will cut the numbers of people on CRBs radar. This will then make it difficult for them to monitor the creditworthiness within hours. So, it will not be an issue of trust but documented evidence in order to get a loan from them.

“It is very likely the speed of service delivery will slow down because of that restriction because we had managed to get to a point where already that information was integrated and automated. It’s quite a step back in terms of processing,” said DLAK chairman Robert Masinde.

This, of course, will have mixed reaction as many Kenyans are certainly prone to ask for loans at such a time when chances of earning income are lower than ever. On the other hand, it is good since the digital micro-lenders were the main reason for the astonishing surge in credit status reports. The list had grown from 4.38 million people in 2018 all the way to 12.4million in 2019, as CBK data shows.

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