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Mobile lending firms disbursed Sh112bn to Kenyans in 4 months

Creditinfo Regional Manager East and Southern Africa Kamau Kunyiha /COURTESY.

NAIROBI, Kenya, Dec 4 – Mobile lending firms disbursed a total of Sh112 billion to Kenyan borrowers between November 2018 and March 2019.

This is according to new data released by the Credit Reference Bureau (CRB) that shows how the 15 different lenders issued out a total of 19.1 million loans for 4.5 million individual borrowers and 855 companies.

Creditinfo Regional Manager East and Southern Africa Kamau Kunyiha said majority of the credits were lent by banks at 93 percent despite the emergence of many lending apps that appeared to bring competition to the banking sector.

“It is quite clear and evident that the sector is dominated by the banks the likes of M-shwari, KCB M-pesa, Timiza which are the main lenders when it comes to digital credit,” said Kunyiha.

Under the 4.5 million debtors, middle-aged men dominated the mobile loans market list borrowing between Sh25,000-50,000.

“Majority of the borrowers were actually men between the ages of 31-40 and despite what most people see or think the age gap is usually young, these are people who are working, and we can only assume the money is being used for commerce,”  Kunyiha added.

The report further states that 66 percent of the borrowers prefer using one lender while another 24 percent prefer borrowing from multiple creditors.

This comes amid reports that showed Kenyans borrow from different lenders and eventually end up being framed as defaulters.

It also comes 9 months after the Central Bank of Kenya ordered banks to review their listing rules which extend the loan payment to six months.

The regulator issued a circular asking mobile loan lender to operate like normal bank loans.

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The new rules have now led to non-performing loans classified as per practical guidelines which demand that any loan due over 180 days be considered doubtful.

In May, the CBK had predicted the revision of CRB rules where he said that when one is blacklisted for too long it might have huge effects in the future where one might be required to pay more than earlier borrowed.

A report by the Betting Control and Licensing Board stakeholders had also revealed that half a million Kenyans were blacklisted by the Credit Reference Bureau, mainly young people under the age of 35 who are jobless.

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