The Government Urged To Save Citizens From Digital Loan ‘Sharks’
The government through the Central Bank of Kenya has been urged to save Kenyans from the online money lending platforms which charge exorbitant interest rates to customers.
A lot of concerns have been raised on digital lending platforms which provide people with easy access to loans of variable amounts. The platforms have grown exponentially in the recent past. A survey has revealed that currently, more than 120 online lenders are operating in the country.
The alarming number should attract setting in place regulatory terms and conditions since the lenders seem to operate in insolation and against the law.
Several petitions have shown that some of these digital micro-finance organisations have turned into ‘sharks’ exploiting consumers who are desperately poor and have been hit hard by harsh economic times.
During this moment when the economy is on the recovery stage, these platforms continue to exploit borrowers through high abnormal interest rates worsening the conditions.
The loan apps are found to charge high-interest rates and have exploitative terms and conditions to their customers.
The lending platforms also go against the stipulated 60 days by Google Play Store policies instead they lend loans in 30 days.
Unfortunately, the platforms charge interest in excess of 400 per cent annualised rates which is 20 times higher than the bank’s annual rate which rarely exceeds 20 per cent.
The survey report has revealed that 55 per cent of the surveyed Kenyans have acquired loans from the online lending platform.
Well, wishers are now calling for sanity in this sector which seems to be a double-edged sword to consumers who are mainly needy Kenyans.
Further, the lenders have gone a notch higher to stress loanees through constant phone calls day and night demanding the repayment of the outstanding loans.
The Central Bank of Kenya (CBK) should rise to the occasion to track the ongoing exploitation to regulate digital lending platforms and offer them with licence and set terms and conditions which must be complied to or otherwise risk cancellation of their licenses.
To save poor Kenyans from digital loan sharks, the time is now.