After assuring the public that they had come up with measures to cushion them financially against COVID-19 pandemic digital lenders are slowly frustrating borrowers in the inside. Digital Lenders Association of Kenya (DLAK) announced they will waive late repayment fees as part of the measures to support customers, but failed to mention the hurdles borrowers will jump through to stand a chance of getting a loan.
“The move will cushion customers who are under distress, following the slowdown in the economy after disruptions to their day to day operations that could affect regular income flow,” said DLAK in a statement.
Uncertainty in these economic times has informed the decision of popular digital lenders to review their businesses among them freezing their credit services. They have also instituted tough measures for access to credit including how one’s income has been affected by COVID-19. For instance, customers applying for a loan on one of the popular mobile loan providers have to wait for ten days before a decision is made on their loan application. The reason for the delay is tied to COVID-19.
Previously, customers would apply for a loan and the money would be debited in these accounts almost immediately. Those whose loan applications fail to go through have to wait for another four days before that can try again. Fear of high default rate can be cited as one of the main reason why these platforms have gone hard on borrowers.
Credit Reference Bureaus were asked to temporarily set free loan defaulters so that they can have access to finance in these hard times. But if a safe borrower has to wait that long to get a loan, how bad can it be for someone with a bad loan reputation?