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Greedy Debtors


Lenders, especially mobile loan apps are still advancing loans to defaulters who are listed with Credit Reference Bureaus (CRBs), a new report has shown.

According to the report by CreditInfo CRB, 70 percent of defaulters listed with CRBs still get loans from lenders, which they also default.

“In spite of getting opportunities to borrow after previous defaults, some debtors are still ending up with bad loans on the new facilities. This is a character issue and largely a show of financial mismanagement,” CreditInfo Chief Executive Officer Kamau Kunyiha said.

Mobile borrowers accounted to 398,160 of the people who got a new loan after previously defaulting another loan between November 2018 and April this year while the traditional (brick and motar banks) defaulters accounted for a lesser sum of 115,869 loans.

Read: 16.4 Million Disbursements Made Since Mobile Lending Apps Opened Shops In Kenya – Report

In the period under review, banks accounted for 93 percent of all mobile loan issued.

The report indicates that only 15 mobile lenders have contracts with CRBs, making it an open field for the hundreds of lenders where borrowers can borrow from multiple lenders and still remain unlisted.

“None of the new lenders are coming in to create new borrowers. Some creditors have therefore decided to take a view on some of the defaulters and have recruited them,” Mr. Kunyiha added.

50 percent of all mobile loans disbursed over the six months review period have been issued to individuals aged between 31 and 40 years while youth aged 25 were fewer.

65 percent of all digital loan issues were women with an average loan amount of Ksh6,086.

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