Bleak Future For Mobile Loans Apps As Most Suspend Services in Kenya

[PHOTO/ COURTESY]

The over 100 mobile loan apps seem to have closed shop in Kenya, after the Central Bank of Kenya denied them Credit Reference Bureau (CRB) services on April 14.

“With immediate effect, CBK has withdrawn the approvals granted to unregulated digital (mobile-based) and credit-only lenders as third party credit information providers to CRBs. The withdrawal is in response to numerous public complaints over misuse of the CIS by the unregulated digital and credit-only lenders, and particularly their poor responsiveness to customer complaints. Thus, unregulated digital and credit-only lenders will no longer submit credit information on their borrowers to CRBs,” said CBK in a notice.

Most of the lenders had already suspended their services, but failed to inform borrowers only telling them to try on a later date.

Read: List Of Unregulated Mobile Loan Apps That Will No Longer Have Access To CRB Information

According to FSD, there were approximately 110 mobile loan apps on the two main app stores from 74 unique developers as of September 2018. As of April 2019, 65 of these apps had been pulled down while 47 new ones developed by 43 unique developers.

It is estimated that there were 92 digital loan apps as of April 2019, but the number has since grown due to new entries into the unregulated market.

Kenyans will now be left to seek loans from the regulated apps, which include M-Shwari, Absa’s Timiza, KCB-M-Pesa and Equity’s Eazzy Loan.

CRBs acted as the first line of defence for the lenders, but now they are left exposed to defaulters who do not fear the consequences of defaulting.

For all the latest technology and business news from Kenya and the world, follow us on Twitter and like us on Facebook.

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: