Save Kenyans from enslaving mobile loans

According to a statement released recently by Safaricom, Kenyans borrow Sh1.57 billion daily through Fuliza, a loan app on the regional telco giant’s M-Pesa mobile money service.

That has elicited both negative and positive reactions on social media with Kenyans trying to explain why this high borrowing occurs. However, the truth is that the high cost of living has forced many people to take out the expensive mobile loans. That has now almost become the norm as a large number of Kenyans have to depend on borrowed money.

Taking out short-term mobile loans has surged since 2020, especially as a result of the Covid-19 pandemic that adversely affected the global economy.

Soon after the first case of the viral disease was reported in the country in March 2020, most Kenyans either lost jobs or had to close down their then thriving businesses, yet this is what used to provide their basic needs. Many have not recovered to date, leaving the owners struggling to repay their loans.

The world is fighting to go back to the pre-pandemic economic status. Prices of goods and commodities have sky-rocketed and continue going up every day. For example, the price of the national staple unga (maize flour) has doubled, making it difficult for many Kenyan families to put food on the table. Raising school fees, medical charges, transportation costs and other needs has affected the nation immensely.

Short-term mobile loans have remained the only option for many Kenyans to borrow money and use it for sustenance. The government, some local and international organisations and concerned stakeholders are having roundtable meetings on how to revive the economy.

Kenya is in the middle of a political transition. Following the 2022 General Election on August 9, Kenyans have great expectations from the incoming government, hoping that it will conclusively address their plight.

Corruption has also affected the economy since the money that is meant to be used by the citizens to generate revenue ends up in the pockets of a few corrupt elites. This is draining the economy, resulting in a biting cash shortfall, hence making borrowing the easy way out.

Nevertheless, these short-term mobile loans have come to the rescue of many Kenyans who were affected by the pandemic. Let the experts work around the best means to revive the economy and reduce borrowing. It’s worrying to see such a situation.

Timothy Osoro, Kisii