Over the last couple of years, mobile money lenders have conquered the space of digital loans. The convenience that comes with these loans has got Kenyans hooked like they were high on opium. With self-regulation at the heart of it, borrowers have been forced to bend a knee to the set terms and conditions that are often unfavorable.
Before getting a loan from a digital provider, most borrowers would consider interest rates, repayment duration and the period of loan disbursement. A majority of these lenders have interest rates that are higher than those of traditional service providers like banks which are regulated by the rate of Interest Act 2016. These interest rates also vary significantly from one provider to another.
Ajua Customer Loyalty Benchmark report Q4 has revealed that despite the growing demand for digital loans, customers increasingly reported experiencing hostile treatment when being asked to repay their loans. Most have resorted to desperate measures to recover loans from borrowers, including accessing information from their customer’s contact list prompting their contacts to push the loanee
to clear their debt without the borrower’s consent.
The aggressive nature of these lenders saw their customer loyalty decline. Most customers cited harsh penalties and high-interest rates upon defaulting as a reason for detraction.
“They send messages each and every day and someone hasn’t declined to pay back the loan,” mentioned one customer.
“Very good but they call and demand money from customers giving too high pressure and even send them to CRB so quickly customers should be given enough time before being blacklisted,” said another
There is room to improve customer experience and promote consumer protection since the inception of the Data act of 2019 according to the report. Digital loan providers can leverage the existing gaps by ensuring transparency by simplifying and communicating Terms and Conditions better, charging reasonable interest rates and ensuring fair and respectful treatment of customers.