Wednesday, May 06, 2020

How Loan Apps Plan A Comeback Post COVID-19

    May 06, 2020   No comments

Loan apps in Kenya
Zenka, KashWay & Zash Loan Apps 

Kenyan digital lenders were badly hit by both Coronavirus negative impact and the government and maybe the customers too.

Kelvin Mutiso, CEO Alternative Circle the company managing Shika Loan App and Digital Lenders Association (DLAK) spokesman already predicted around ⅔ of the digital lenders will be out of business post Coronavirus pandemic. 

When Coronavirus came, most of the investors keeping the digital lenders going started pulling out in fear of loosing their money. This made the apps have little to none to lend.

When the apps stopped lending, borrowers also stopped repaying their loans in fear of being denied the next loans. This made the digital lenders lack even more money to push on.

As if that wasn't enough, Central Bank of Kenya (CBK) came in and delivered the biggest blow by stopping all unregulated digital lenders from submitting and accessing borrowers information from the CRBs. It became even harder to do business anymore. 

Will Loan Apps Close Business And Go

Kenyans are mixed in reactions at the moment and this is because the digital lenders helped some and destroyed some. Some people started businesses with the money they got as loans from the loan apps while others joined CRB blacklist for the first time. 

The digital lenders though have their own view on their impact on Kenyans and it seems positive. This gave the lenders courage to approach CBK, to discuss the biggest blow on them ,Never to Access Borrowers' Information from the CRB.

This is the best preparation of a comeback post COVID-19. Digital lenders will have to accept regulation by CBK, be controlled like any other regulated lenders and continue doing business in peace. When digital lenders comeback, you should expect some slightly different rules as a borrower. 

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Mwabaya Katana

About Mwabaya Katana

Mwabaya Katana is a Finance Online Researcher and Writer.He is the founder of 'Loans Kenya' Blog.

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