Loan applications are now taking up to 10 days without a guarantee that any cash will be offered
Millions of cash-strapped Kenyans seeking small quick loans amid declining revenues due to the coronavirus pandemic are set to suffer after digital mobile lenders froze credit services.
Loan applications are now taking up to 10 days without a guarantee that any cash will be offered. Previously, it took seconds to get the money.
Operators of the popular digital mobile loan applications cited the economic uncertainty caused by the deadly virus, with most saying that they were “reviewing” their businesses.
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However, 17 of the applications operating in Kenya under the umbrella body, Digital Lenders Association of Kenya (DLAK) announced they will waive late repayment fees “as part of the measures to support customers.”
“The move will cushion customers who are under distress, following the slowdown in the economy after disruptions to their day to day operations that could affect regular income flow,” said DLAK in a statement yesterday.
Tala and Branch, which belong to DLAK, are some of the prominent apps that have frozen lending to individuals and instituted tough measures before anyone can access credit.
“Due to the Covid-19 crisis, decisions on loan applications will have delays of up to ten days,” Tala told customers applying for a loan on its app.
Branch has instituted tough vetting criteria with questions on whether one’s income has been affected by the virus. Unsuccessful loan applicants are told to try four days later.
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Tala last week launched a Sh605 million “rebuild fund” aimed at helping Kenyan businesses weather the coronavirus economic disruption and has suspended overdue reporting to the Credit Reference Bureaus (CRBs).
This is in light of President Uhuru Kenyatta’s order to stop listing of Kenyans by CRBs.