Up To ⅔ Of Digital Lenders ,Loan Apps To Close Business Post COVID-19

In Kenya, we have been enjoying quick mobile loans from digital lenders through the famous mobile wallet ,M-Pesa, for more than 5 years now.

The number of these lenders also increased each year making availability of cheap and fast loans almost reliable. So many stories, both positives and negatives  emerged from the interactions between the digital lenders and the borrowers, but that's how the the market should be.

Fate Of Digital Lenders Post COVID-19 

All was well till late last year when Coronavirus pandemic stepped in. The world economy was shaken and still shaking. Digital lender were not spared.

Digital Lenders Association (DLAK) Spokesman, Kelvin Mutiso who is also the CEO, Alternative Circle, the company managing Shika Loan App had a lot to say about the future of digital lending;

• Currently digital lenders can lend much or rather stopped lending because the estimated capability of the borrowers repaying the loans are extremely low. 
• Investors , partners and venture capitalists have stopped funding due to high uncertainties caused by Coronavirus in the market. This therefore translates to no loans
• The Government of Kenya, through the Central Bank stopped unregulated digital lenders from working with the CRB. This means no information regarding the borrowers. Again most digital lenders are 'trust based' and the only catch is CRB for defaulters 
• Due to the circumstances mentioned above and more , there will be exit of up to ⅔ of the current digital lenders out of the market. 

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