Regulate digital lending platforms now
Hard economic times, coupled with high cost of living, made many low-income earners to seek refuge in digital loans.
The advent of technology brought about a lot of development in many spheres of life — like education, communication and banking. The most revolutionary was the ease and convenience of financial transactions.
The difficulty in borrowing money from banks created an avenue for digital money lenders to exploit borrowers after luring them with more attractive terms. Hard economic times, coupled with high cost of living, made many low-income earners to seek refuge in digital loans.
What baffles the borrowers is the manner in which the lenders demand their money back. It was interesting watching an episode on a local TV stations about tribulations of the borrowers.
The persistent threats in unending phone calls to the borrowers and their phone book contacts are irritating. The contacts are caught off-guard when the debt collectors descend on them with severe warnings and all manner of intimidation yet they are neither the borrowers nor even guarantors.
Inasmuch as default on loans is unethical, there should be decent ways of lenders recovering their money.
Statistics indicate 14 million Kenyans are listed as defaulters with the credit reference bureaus (CRB). This seems not to deter more Kenyans from borrowing.
It’s good to learn that plans are underway to regulate the digital lending platforms. This will go a long way in ensuring that there is order and decorum to both the borrower and the lender when transactions are undertaken.
There should be more organised and decent ways that lenders can use to recover their loans. Threats such as “plucking a defaulter’s kidney” or “chopping off their arms” should not be allowed. It’s actually criminal.
Borrowers should always remember that there is nothing for free. Let one borrow what they can pay back without straining.
Calvine Oredi, Vihiga
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The announcement by Central Bank Governor Patrick Njoroge, about regulating the mobile money lenders was long overdue.
Like many other Kenyans, I was hit hard by the Covid-19 pandemic. I, therefore, resorted to taking out short-term loans for survival. Of the five apps that I have on my phone, however, one is notorious for harassing borrowers. Once you take out a loan, which they give for two weeks, they start calling you and your close contacts three days prior to the due date.
For instance, the recent loan that I took out was due on July 19 (Monday midnight), according to my interpretation), but as early as Saturday, July 17, they were already calling, texting and ‘whatsapping’ me with all manner of threats (skip tracing, calling your relatives and all that). Indeed, they called my uncle.
Investigate this particular app; the rest wait for the due date.
Joyce Njuguna, Nairobi
