NAIROBI, Kenya, Nov 9 – Central Organization of Trade Unions (COTU) has called on the Central Bank of Kenya to crackdown mobile lenders who are taking advantage of Kenyans through high interest rates on various loans given to them.
In a statement, COTU Secretary General Francis Atwoli said Parliament should also enact laws that are clear on interest rates charged by microfinance lenders.
“In the name of financial inclusion, the digital microfinance institutions and by extension mobile lenders have continued impoverishing Kenyans by imposing draconian interest rates on their credit facilities. This, in no uncertain words is daylight robbery practiced by institutions,” Atwoli said.
He pointed out that the organization has received numerous petitions from Kenyans who have decried exploitation by digital microfinance institutions.
“On the flip side, these microfinances have not only made the average Kenyan poorer, but also killed businesses by making it harder for them to access further credit and eating into their small profits,” he said.
Atwoli stated that while most banks have interest rates of between 12 and 14 per cent per annum, some digital lending lenders have interest rates of 70 to 500 per cent per annum which he termed unacceptable.
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