The inception of mobile money lending apps has transformed the financial landscape in the Kenyan market in over time. Mobile money lending apps are easily accessible, flexible and much more efficient compared to traditional ways of getting loans from the bank.
Statistics confirm that there are 49 mobile money lending apps in Kenya, with the likes of Okash, Tala, Branch, Timiza, Zidisha, Stawika, Mkopo Rahisi taking the lead.
In a press briefing, Central Bank of Kenya (CBK) Governor Patrick Njoroge raised his concerns about the rate at which Kenyans are borrowing from the mobile loan apps. He noted that the mobile loan apps have become predatory with their exorbitant interest rate likening them to shylocks
“The issue has been there for a while, they prey on individuals and you can’t blame people for taking the loans, maybe out of desperation,” stated Dr. Njoroge.
Sadly the law does not provide for the regulation of the mobile loan apps, giving them grounds to manipulate their products and make huge profits through very high-interest rates. CBK governor outlined that these mobile loan apps charge high-interest rates necessitating for a law that will help the regulator get a grip on their financial services.
“There has to be a law in place to regulate these apps but how or who regulates them is anyone’s guess,” he insisted.
Mobile loan apps have become so popular among Kenyans, with a majority of them barely take time to read through the lengthy terms and conditions stipulated before they sign up for the loans, only to discover later that the contract is very binding and some clauses are atrocious.
There has been a number of incidents with the loan subscribers lodging complaints on infringement into their privacy and databases, on top of doubling interest rates that are very harsh to their financial situations.