Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
COURTESY

Kenya

Borrow from Opesa and Okash at your own risk-DLAK

NAIROBI, Kenya, June 9- Digital Lenders Association of Kenya has distanced itself from two online credit operators over debt shaming practices on borrowers who default on loan repayment.

The members in a statement on Monday said that Opesa and Okash are known for invading a customer’s privacy which is against the Kenyan data protection laws and has further tainted the reputation of digital lenders in Kenya.

“Not only does this behavior go against Kenyan data protection laws, but it reeks of indignity. By reaching out to a customer’s contact list, Opesa and Okash rob the individual of basic dignity and consumer rights,” reads DLAK statement.

According to DLAK, consumers of mobile app Okash and Opesa who delayed or defaulted on their loan repayments often have the lenders reach out to people in their contacts list in a bid to recover the funds.

 “This can have long term effects on their psychological well-being and damage relations that may have taken years to build,” said DLAK Chairperson Robert Masinde.

DLAK members include Tala, Alternative Circle, Stawika Capital, Zenka Finance, MyCredit, Okolea, LPesa, Kopacent, Four Kings Investment among others.

The members last year launched a regulatory program which it said was for the benefit of consumers.

Among the resolutions was to ensure that consumers enjoy data privacy where digital lenders collect personal data only relevant to the services provided, and for which the borrower has given express permission.

The announcement comes a time when the digital lenders have for long been accused of charging high interest rates, using crude methods to recover loans, and predatory lending tactics by offering loans to borrowers with no means to pay back.

Advertisement. Scroll to continue reading.

Several the unregulated microlenders have invested in Kenya’s credit market in response to the growth in demand for quick loans.

In April, Central Bank of Kenya barred unregulated digital mobile lenders from forwarding the names of loan defaulters to credit reference bureaus.

The directive also affected members of DLAK who already have a regulatory framework.

Currently, CBK governor Patrick Njoroge announced during post MPC held last month that the lenders are now engaging with the regulator for a framework aimed at protecting borrowers from mistreatment by the online lenders.  

Millions of Kenyans have been listed on Credit Reference Bureaus by the digital mobile lenders for loans as little as Sh500.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Headlines

NAIROBI, Kenya, Mar 16 – The World Bank has given the Kenyan government USD 60 Million (Sh6.1 billion) to help combat the deadly coronavirus pandemic...