• About Us
  • Archives
  • SWG Registration
Samrack Media
Mahiga Homes
  • Home
  • ALL NEWS
  • Diaspora
  • Africa
    • AFRICA
    • KENYA
  • BUSINESS
    • BUSINESS
    • INVESTMENTS
    • REAL ESTATE
    • TECHNOLOGY
  • Politics
  • Health
    • HEALTH
    • EDUCATION
  • Religion
  • People
    • PEOPLE
    • LIFESTYLE
    • RELATIONSHIPS
  • Obituaries
  • Videos
  • Events
No Result
View All Result
  • Home
  • ALL NEWS
  • Diaspora
  • Africa
    • AFRICA
    • KENYA
  • BUSINESS
    • BUSINESS
    • INVESTMENTS
    • REAL ESTATE
    • TECHNOLOGY
  • Politics
  • Health
    • HEALTH
    • EDUCATION
  • Religion
  • People
    • PEOPLE
    • LIFESTYLE
    • RELATIONSHIPS
  • Obituaries
  • Videos
  • Events
No Result
View All Result
Samrack Media
No Result
View All Result

Kenyans have become prisoners of mobile loan Apps, shows study

samrack by samrack
March 26, 2018
in Africa, Business, Diaspora, Kenya, Kenya Diaspora News, News, U.S Diaspora
A A
0
Kenyans have become prisoners of mobile loan Apps, shows study
Share this
FacebookTwitterPinterestEmailWhatsAppLinkedIn
A woman uses her mobile phone. 800,000 Kenyans are reported taking several loans to repay others. FILE PHOTO | NMG

Kenyans have become prisoners of mobile loan Apps, shows study

The proliferation of digital loan platforms has not improved lives, a new survey shows.

Instead, the survey shows, many Kenyans have become prisoners of these systems, in some instances borrowing to gamble or settle previous debts.

The study says about 6.5 million Kenyans are digital borrowers with 31 per cent taking the cash to try their luck in betting.

Sixteen per cent of Kenyans have never taken loans through mobile phones while 20,000 Kenyans (three per cent) reported borrowing to place bets, says the report.

The joint survey conducted by the non-state financial inclusion agency – FSD-Kenya, Central Bank of Kenya, Kenya National Bureau of Statistics and Consultative Group to Assist the Poor says that available digital loan products have not improved livelihoods.

“Digital credit is not reaching everyone and remains ill-suited for most of the population, such as farmers and casual workers, whose livelihoods are characterised by irregular cash flows,” says the phone survey.

While borrowing to meet basic needs as well as replenish stocks in small businesses were the main reasons for digital borrowing, 800,000 Kenyans reported taking several loans to repay others.

“The rise of the digital credit market has raised concerns about the risk of excessive borrowing and over-indebtedness among lower-income households.

Digital loans are easy to obtain, short-term, carry a high interest rate and are available from numerous bank and non-banking institutions,” states the report.

About three million borrowers reported late loan repayments that attracted hefty penalties with nine per cent of defaulters being reported to the credit reference bureau as risk-averse loanees.

“Half of borrowers spent their savings to repay loans, 20 per cent of loanees reported reducing food purchases and 16 per cent reported borrowing (mostly through family and friends). Poor business performance and loss of jobs in 2017 were the main cause of default,” it says.

The study calls for the establishment of an oversight authority to scrutinise the lucrative interest rates and penalties used by the digital loan providers some of which don’t fall under any regulatory regime.

The rates used are not bound by the Central Bank interest regime currently at a maximum of 13.5 per cent, giving a leeway for digital loan providers to charge higher. Some providers charge between 7.5 to 10 per cent interest for a one-month loan.

Dubbed, “The Digital Credit Revolution in Kenya: An Assessment of Market Demand, 5 Years On”, the survey finds that about one million borrowers did not understand the interest regime applied where some had disbursed loans, still held in the mobile account, withdrawn abruptly.

The study proposes development of tools to track over-indebtedness whose adverse effects were hurting the well-being of families with nine per cent of the borrowers (breadwinners) being blacklisted.

It calls for further studies on product innovation that will promote proper use of loans, thereby, ensuring digital borrowers are not stuck with low-value, short-term, expensive credit despite building positive credit histories.

Source: Daily Nation

 

Tags: Kenyans have become prisoners of mobile loan Appsshows study
Previous Post

GSMA Opens new regional offices in Kenya

Next Post

Kenyan Family Shocked by News that their Son Could Be a Serial Killer in the US

Related Posts

DP Ruto picks Rigathi Gachagua as his running mate
Kenya

DP Ruto picks Rigathi Gachagua as his running mate

May 15, 2022
Muteshi Land Grabbing Case Haunts Ruto
Business

Muteshi Land Grabbing Case Haunts Ruto

May 13, 2022
Boyfriend of Missing US-based Kenyan Woman Considered a ‘Person of Interest’ in Her Disappearance
Diaspora

Boyfriend of Missing US-based Kenyan Woman Considered a ‘Person of Interest’ in Her Disappearance

May 13, 2022
Five Reasons Why Real Estate Increases in Value
Business

Five Reasons Why Real Estate Increases in Value

May 13, 2022
Kenya:9,484 children were defiled last year— Health ministry
Health

Kenya:9,484 children were defiled last year— Health ministry

May 13, 2022
Standoff at JKIA After Family Refuses to Pick Body of Kin Who Died in Saudi Arabia
Diaspora

Standoff at JKIA After Family Refuses to Pick Body of Kin Who Died in Saudi Arabia

May 12, 2022
Next Post
Kenyan Family Shocked by News that their Son Could Be a Serial Killer in the US

Kenyan Family Shocked by News that their Son Could Be a Serial Killer in the US

Please login to join discussion
Job Openings Below is a list of current job openings at Northeast Clinical Services, Inc.. Please click on an opening in the list to view details and apply. Job Openings Below is a list of current job openings at Northeast Clinical Services, Inc.. Please click on an opening in the list to view details and apply. Job Openings Below is a list of current job openings at Northeast Clinical Services, Inc.. Please click on an opening in the list to view details and apply.
ADVERTISEMENT
ADVERTISEMENT

Latest News

DP Ruto picks Rigathi Gachagua as his running mate

Muteshi Land Grabbing Case Haunts Ruto

Boyfriend of Missing US-based Kenyan Woman Considered a ‘Person of Interest’ in Her Disappearance

Five Reasons Why Real Estate Increases in Value

Kenya:9,484 children were defiled last year— Health ministry

Standoff at JKIA After Family Refuses to Pick Body of Kin Who Died in Saudi Arabia

Kenyan Nurse Wins Sh29 Million Global Nursing Award in Dubai

Russia Questions US-Funded Biolab in Kenya

GOVERNOR MUTUA’S BIG BLOW AS TRIBUNAL STOPS HIM FROM EXITING AZIMIO LA UMOJA ONE KENYA COALITION!!

Canada Issues Travel Advisory to Its Citizens in Kenya

We are grateful for your monthly or one-off donations To Samrack Media: Cash App No: 781-888-8770 $SAMRACK001

Money

New Digital Skills Helps Unemployed Kenyan Youth Earn In Cryptocurrency

New Digital Skills Helps Unemployed Kenyan Youth Earn In Cryptocurrency

by samrack
November 19, 2021
0

New Digital Skills Helps Unemployed Kenyan Youth Earn In Cryptocurrency This week sees the launch of a new initiative to equip...

A simple guide to Government Bonds investing in Kenya

A simple guide to Government Bonds investing in Kenya

by samrack
September 17, 2021
0

A simple guide to Government Bonds investing in Kenya A treasury bond (T-bond) is a medium term to long term...

Politics

GOVERNOR MUTUA’S BIG BLOW AS TRIBUNAL STOPS HIM FROM EXITING AZIMIO LA UMOJA ONE KENYA COALITION!!

GOVERNOR MUTUA’S BIG BLOW AS TRIBUNAL STOPS HIM FROM EXITING AZIMIO LA UMOJA ONE KENYA COALITION!!

by samrack
May 11, 2022
0

GOVERNOR MUTUA'S BIG BLOW AS TRIBUNAL STOPS HIM FROM EXITING AZIMIO LA UMOJA ONE KENYA COALITION!!   Governor Alfred Mutua’s...

You are free to use Nairobi expressway from next Saturday – Uhuru

You are free to use Nairobi expressway from next Saturday – Uhuru

by samrack
May 8, 2022
0

You are free to use Nairobi expressway from next Saturday - Uhuru Other than the ban on photography, skaters, pedestrians,...

  • About Us
  • Archives
  • SWG Registration

© 2021 SAMRACK - Diaspora News & Updates; design by: Samrack.

No Result
View All Result
  • Home
  • ALL NEWS
  • Diaspora
  • Africa
    • AFRICA
    • KENYA
  • BUSINESS
    • BUSINESS
    • INVESTMENTS
    • REAL ESTATE
    • TECHNOLOGY
  • Politics
  • Health
    • HEALTH
    • EDUCATION
  • Religion
  • People
    • PEOPLE
    • LIFESTYLE
    • RELATIONSHIPS
  • Obituaries
  • Videos
  • Events

© 2021 SAMRACK - Diaspora News & Updates; design by: Samrack.

Page generated in 0.826 seconds. Stats plugin by www.blog.ca