Millions of cash-strapped Kenyans looking for small, quick loans amid falling income from the coronavirus pandemic are expected to suffer after digital mobile lenders freeze credit services.
Loan applications now take up to 10 days with no guarantee that no money will be offered. Previously it took a few seconds to get the money.
Operators of popular digital mobile lending apps cited the economic uncertainty caused by the deadly virus, with most saying they were “reviewing” their businesses.
However, 17 of the apps operating in Kenya under the Kenya Digital Lenders Association (DLAK) umbrella announced that they would waive late repayment fees “as part of customer support measures.”
“This move will cushion customers in distress, following the downturn in the economy after disruptions to their daily operations that could affect regular revenue streams,” DLAK said in a statement yesterday.
Tala and Branch, which are owned by DLAK, are some of the prominent apps that froze personal loans and instituted tough measures before anyone could access credit.
“Due to the Covid-19 crisis, decisions on loan applications will have delays of up to ten days,” Tala told clients who apply for a loan on her application.
Branch instituted strict audit criteria with questions about whether a person’s income has been affected by the virus. Unsuccessful loan applicants are encouraged to try four days later.
Tala last week launched a 605 million shillings “reconstruction fund” aimed at helping Kenyan businesses weather the economic disruption of the coronavirus and suspended overdue reporting to credit reference bureaus (CRBs).
This is in light of President Uhuru Kenyatta’s order to stop the CRB listing of Kenyans.