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#DeepDive: Mobile lending in Kenya – time for a leash?

NAIROBI, Kenya, Aug 17 – In a span of six years, there has been a proliferation of mobile platforms offering microloans to mobile users in Kenya with the Central Bank estimating that there are over 6.5 million digital borrowers in the country.

However, the over 25 mobile lenders operate in a regulatory lacuna leading to accusations of exploitative interest rates and lack of transparency in the terms and conditions of the mobile loans.

CBK Governor Dr. Patrick Njoroge has been quoted as saying the digital lenders, “are worse than shylocks” vowing to bring order in the sub-sector.

However, the benefits of the digital loans cannot be ignored. The platforms provide quick, unsecured microloans for millions of people who need short-term financing for business or personal needs.

The fact that banks and other financial institutions are now launching their own apps to tap into the mobile loans market is an indication of the demand and potential of the microloans segment powered by the mobile phone

In this episode of Deep Dive, we discuss regulation, interest rates, risks, trends and way forward in mobile lending with; Rose Muturi – Regional Manager, Tala; Zeituna Mustafa – Assistant Manager, MicroSave and Edoardo Totolo, Research Economist at FSD Kenya.

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