National News
Mobile Loan Apps Set First Loan at Ksh 4,000
Customers will get access to in-app digital borrowing history and repayment behavior which will also be accessed by all DLAP members so as to determine how much to lend to a customer.
Mobile loan users now have a reason to smile as the initial lending maximum set at Ksh 4,000 with no loan history. This decision is part of the code of conduct signed by lenders under the newly formed Digital Lenders Association of Kenya (DLAK).
The lobby, which currently consists of twelve members, says this move will ensure member firms match customer debt levels with repayment ability so as not to plunge borrowers into over indebtedness.
DLAK was formed as a way to adopt a self-regulatory framework and a set of shared principles to guide members.
Central Bank of Kenya (CBK) Governor Patrick Njoroge had recently raised concerns over the increasing number of mobile loan apps that may be exploiting Kenyans. CBK has also in the recent past put on notice unlicensed and unregulated digital lenders as the government to protect consumers from fraudulent dealers.
Members of the lobby group include Tala, Alternative Circle, Stawika Capital, Zenka Finance, MyCredit,Okolea, Lpesa, Kopacent, Four Kings Investment, Kuwazo Capital and Finance Plan.
Under the groups code of conduct, customers will get access to in-app digital borrowing history and repayment behavior which will also be accessed by all DLAP members so as to determine how much to lend to a customer. Business daily reported.
“Where possible, lenders will attempt to help contactable customers to restructure their debt or otherwise make every reasonable effort to help their customers return to good standing,” reads DLAK’s code of conduct in part.
The digital lending industry have in the recent past been put on spot by the senate who called for its regulation on claims they are saddling borrowers with high-interest rates. The fims were accused of offering mobile loans at rates above the cap provided in law and occasioning heavy borrowing and indebtedness mainly among the low-income groups on easy access to loans. Some of the apps opffer an interest rate equating to 180 percent over a year.
