Online lending apps are on the spot once more after Central Bank of Kenya Governor, Patrick Njoroge expressed concerns over excessive borrowing.
Thursday, Dr Njoroge said Kenyans were borrowing at risky rates and that there was need to exercise caution by borrowers.
Shylocks
Njoroge reported that the mobile loan apps had become predatory and likened them to shylocks over the high-interest rates they charge.
“The issue has been there for a while, they prey on individuals and you can’t blame people for taking the loans, maybe out of desperation,” stated Dr. Njoroge.
High-Interest rates
The CBK boss went on to point out that the mobile loan apps charge high-interest rates at will adding that while there is a need to regulate them, the law does not provide for a specific regulator.
“There has to be a law in place to regulate these apps but how or who regulates them is anyone’s guess,” he reported.
49 mobile loans firms
While confirming that there are a total of 49 mobile loans in the country, Njoroge asked Kenyans to be keen on the details that are in the terms and conditions to avoid being duped.
The mobile loan apps popularity has been on the rise over the past few years due to their accessibility, flexibility, and efficiency in granting loans.
Unlike banks which tend to be more rigid in their loaning programs, mobile loan apps in Kenya are accessible to all android phone users including the marginalized and remotely located.
Breach of privacy
In January 2019, mobile loan apps in Kenya were accused of breaching their clients’ privacy when it was alleged that some of them went out to contact every single person in the loanees contact list whey they default.
A large majority of consumers who take mobile loans do not read the lengthy and densely-worded set of conditions and terms they are committing to and are later shocked when the contracts are enforced.