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Mwananchi Credit says will not change credit terms during coronavirus period

By Standard Reporter | April 11th 2020

Following uncertainty brought about by the coronavirus pandemic in Kenya, many lending institutions are reviewing their businesses.

Citing the economic uncertainty brought about by the pandemic, digital lenders for instance last week announced a review of time taken to approve loans from the previous instant to 10 days creating anxiety among the borrowers.

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.

However, on Saturday, leading micro lender Mwananchi Credit said it would increase its loan portfolio during this period to walk with Kenyans during a difficult moment.

A week ago, it added a new trade-in car loan facility to its asset-financing loans and introduced interest-free loans to existing customers to cushion them from financial hardships during the COVID-19 pandemic.

Many employees have already lost their jobs while a good number of employers have reduced salaries for their staff, thus squeezing individual incomes.

Consequently, lenders have tightened lending terms and conditions to lock out borrowers perceived to be high-risk, while others have suspended lending altogether.

Mwananchi Credit says it has maintained its normal terms and, in fact, sweetened the deal to stand with Kenyans during these difficult moments in line with President Uhuru Kenyatta’s appeal to lenders to ease conditions for borrowers.

“We understand the situation Kenyans are facing and so we haven’t changed our terms as an indication that we are in this together,” says Dennis Mombo, Mwananchi Credit CEO. “If we have to adjust our terms it has to be easing the burden, not making it worse.”

Mombo said all its range of credit facilities are still active, which include logbook loans, asset financing, weekend loans, check discounting, LPO financing as well as salary advances, import financing and secured loans.

Mombo said Mwananchi has adjusted its operations to comply with Ministry of Health guidelines on social distancing to reduce the possibility of infections among staff and customers. This will enable it to serve its client during the partial lockdown in some towns occasioned by the Coronavirus crisis.

“We not laying off employees nor reducing salaries like it is happening across the economy,” Mombo says. "As a company, we are absorbing the extra cost of keeping them without changing their terms."

Due to the pandemic, other lenders have 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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