Kenya lawmakers to investigate ‘social menace’ of loan apps


Over the last few years, millions of Kenyans have downloaded loan apps, some of them developed by US companies. Most of the customers had never borrowed from a bank before. — Reuters

Kenyan lawmakers are starting an investigation of digital credit apps, which one member of the National Assembly called a "social menace” that has destroyed many livelihoods.

The probe will be conducted by the Finance Committee after a petition from Anthony Oluoch, the representative for a constituency in the capital, Nairobi. He said that the dozens of mobile phone lending apps that have sprung up in Kenya in recent years need to be regulated.

"The digital borrowing has become a social menace responsible for suicides, divorces, family breakups,” Oluoch said in his petition to Parliament. "The lenders lure and trap borrowers into unnecessary borrowing and a vicious cycle of expensive loans by raising loan limit upon repayment of the initial loan.”

Over the last few years, millions of Kenyans have downloaded loan apps, some of them developed by US companies. Most of the customers had never borrowed from a bank before. The apps charge interest rates that often exceed 100% annualised, and many Kenyans are struggling to repay their debts, as Bloomberg Businessweek reported last month. Nearly one in 10 adults in the country have defaulted on a digital loan.

The committee’s report is due in 60 days. Oluoch wants the National Assembly to direct the Central Bank of Kenya and the Communication Authority of Kenya to audit digital lenders. – Bloomberg

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!
   

Next In Tech News

Slowing crypto startup funding may still surpass 2021 record - Pitchbook
Apple: Most iCloud data can now be end-to-end encrypted
Amazon sued in US for ‘stealing’ delivery driver tips
Exposure to White supremacist ideologies in online games surged in 2022
Musk's bankers mull new Tesla margin loans to slash Twitter debt - Bloomberg News
US man charged with taking nude photos of woman with smoke detector spy camera
North Korean hackers exploited Seoul Halloween tragedy to distribute malware, Google says
The return of pay phones? One US hacker wants to make it happen
Elon Musk briefly loses top spot on Forbes billionaire list
Twitter to hike Blue pricing to $11 for iPhone app users -report

Others Also Read