• There are plans to regulate digital lending with the Central Bank of Kenya pushing for their licensing.
• Atwoli said the digital lenders have continued impoverishing Kenyans by imposing draconian interest rates.
Image: ENOS TECHE
Cotu has asked the Central Bank of Kenya to save Kenyans from digital money lenders.
In a statement on Tuesday, Cotu secretary general Francis Atwoli said many Kenyans have sent countless petitions on the exploitation being meted against them by digital microfinance institutions.
Atwoli said the digital lenders have continued impoverishing Kenyans by imposing draconian interest rates.
"We would like to remind the CBK governor that the conduct of the digital microfinance institutions is not only illegal but also ungodly," he said.
"It is immoral for anyone to take advantage of the tough financial situations that Kenyans are going through to reap maximum benefits."
Atwoli said the money lenders should be helping the poor and small businesses grow not stealing from them.
"We equally call upon parliament to come up with sound legislation to facilitate the crackdown on the rogue digital microfinance sector in Kenya," he said.
In October, a new survey indicated that an average of six out of ten Kenyans have borrowed money from a digital lending platform with men outnumbering women.
Men are also not loyal to one lender and operate up to four different apps, unlike women who are loyal to a single brand.
Youth between the age of 30-34 years are the biggest borrowers.
According to the State of Digital Lending in Kenya by consumer intelligence firm ReelAnalytics, 55 per cent of the surveyed Kenyans say they had acquired loans from these entities.
The money mostly goes into household use mainly bills and quick solutions to buying products such as cooking gas, fuel and personal use.
Digital loans also top business growth credit sources mainly for SMEs seeking to bolster their working capital, in the wake of the Covid-19 pandemic when banks cut down on individual and households loans.
There are plans to regulate digital lending with the Central Bank of Kenya pushing for their licensing.
Digital lenders will have to comply with data protection laws or risk licenses cancelled if the Central Bank (Amendment) Bill, 2021 sails through.
There is also a push for compliance to data privacy, likely to limit high cases of debt-shaming.
Edited by D Tarus