How online lenders drive Kenyans to the wall

Allan Muthiga was in a fix and needed some money urgently. And it was at night.

Allan, who resides in Umoja, was certain that he had already been listed on Credit Reference Bureau (CRB) for defaulting on his Higher Education Loans Board loan after university.

Accessing loans had been difficult, but he decided to try his luck with a mobile loan app to raise some money. He landed on Okash, downloaded the app and requested for a loan.

“I qualified for Sh2,000, though I needed more. I decided to just take it, after an hour Sh1,664 was remitted to my phone and the details showed that I was supposed to pay within two weeks,” said Allan.

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But at the end of the two weeks he was unable to pay. He spoke to Okash and asked them to give him one more week and roll over the loan with interest.

But the firm kept calling, and when he still could not pay, they called his mother.

“It seems they did not believe me because the next minute they called my mother telling her that I was going to be blacklisted and things were going to be bad for me. My mother was shocked,” he said.

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Loan application

He had indicated his mother as the next of kin in the loan application. Allan told his mother he could not raise the money at the time.

Three days later, they started sending messages to his contacts. They sent messages to his colleagues, his boss and every other person on his contact list.

“I woke up that morning to phone call after phone call of people complaining why I put them as guarantors and where I got their authorisation from. It was chaotic,” said Allan.

He added: “I did not know these people had harvested all my contacts and a third party other than the app would access it and start sending messages.”

He called Okash and asked them why they had chosen to embarrass him. He paid the money nonetheless, but he was nine days late. He was supposed to pay on April 1, 2019, but he paid on April 10, 2019.

The loan had been earning an interest of 2.5 per cent daily. This means that Brian had to pay an additional charge of Sh584 for the nine days he had defaulted.

“I paid the Sh2,000 I owed them, but they said there was an overcharge which continued growing, I don’t know where it has reached to date,” said Allan. He has no intention of paying the overcharge.

He now says that a premium of about Sh350 on a Sh2,000 loan for two weeks was too much and that the lenders should be understanding and have a rollover of at least one month.

“People should not know your private business but someone is exposing it out there. It was malicious and it left me bitter, angry and I felt psychologically harassed,” he said.

Sophie Onyango was one of Allan’s contacts who received a message from Okash asking her to tell him to pay his loan.

“I wondered how they got my number, I got worried and sent the message to Allan for explanation,” said Sophie.

At first, she thought it was Allan who had given out her number to Okash. Allan had to reach out to her and explain himself.

Another borrower

Another borrower has vowed not to repay the Sh2,000 she took from Okash, claiming they embarrassed her.

Margaret Omollo took the loan about two months ago and it has accumulated to Sh4,000.

“After sending messages to everyone in my phone, will they also tell them that I have repaid, will they repair the damage they have done?” posed Omollo.

She said Okash officials call and send messages with different numbers.

“The messages sound like threats to appear as if you are some big criminal who has run away with millions and the calls do not stop,” said Omollo.

She is afraid that the lender may have accessed some private information from her phone.

Reached for comment, the Managing Director Opera Group, Edward Ndichu, said he could not directly respond to the issue. He instead gave an email address to which The Standard wrote to seek response but there was no response by the time of going to Press.

The Standard also tried earlier to reach Okash through several phone numbers they use to contact their customers but they were unavailable.

Central Bank of Kenya (CBK) Governor Patrick Njoroge likened mobile phone money lenders to Shylocks and admitted that the business is not regulated.

Lawyer, Jamal Bake said it was wrong for the lenders to access borrower's contacts without their permission. “That is a breach of privacy. The privacy of every Kenyan is guarded by the Constitution,” said Bake. By April 2019, only 10 were licensed by CBK.

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