As Kenya binges on easy credit, public shaming follows
A surge in digital lending has seen thousands of Kenyans swipe their way into debt (AFP/Simon MAINA)
It only took Kenyan security guard Ambrose Kilonzo a few seconds and zero-collateral to secure a loan from a mobile app. But when he defaulted, lenders called his boss, putting his job at risk.
It is an ordeal experienced by many in Kenya, where a surge in digital lending has seen thousands of people swipe their way into debt via high-interest loans like the one taken by Kilonzo.
Although the apps promise quick and discreet cash to the unbanked, failure to repay usually results in public humiliation, with debt collectors calling the borrower’s friends, family and even employers in a bid to shame them into paying up.
Kilonzo, who earns 23,000 Kenyan shillings ($206, 178 euros) a month, never expected to throw his job into jeopardy for a loan amounting to less than $30.
"This was like a top-up," the 38-year-old told AFP.
"The way it was packaged, it was so easy to get the money. It wasn’t a big deal."
With only 41 percent of the population having access to a bank account, according to 2019 data from the Central Bank of Kenya and the finance non-profit FSD Kenya, digital lending has boomed in the East African nation.
Its rapid growth has been fuelled by a vibrant technology sector which includes success stories like Mpesa, a mobile money service created by telecom giant Safaricom and used by more than half of Kenya’s population of 53 million.
The country boasted just five digital lenders in 2015. Today, it is home to over 100 apps including Silicon Valley-backed Tala, Chinese-owned Okash and Opesa that advance up to $60 million in loans per month.But they are increasingly coming under scrutiny for predatory practices including sky-high interest rates of up to 400 percent.They are most notorious however for scraping data from borrowers’ phones and using it to shame those who have failed to pay up.- Hunger and humiliation -When Patricia Kamene fell behind on her interest payments, her friends were hit with a barrage of calls by a debt collector.
