A group of boda boda riders huddled together at the Syokimau bus stage. It is well past the curfew hours imposed countrywide to stem the spread of the coronavirus, but the group seems unbothered. Their discussion is punctuated by occasional bouts of laughter and calls from some of the riders as they try to draw the attention of passersby.
My curiosity is piqued, and I ask the rider whom I had hailed down minutes earlier what the gathering is about late at night and past curfew hours. READ MORE
“It is a meeting of our chama (an informal cooperative society) members, whose main agenda is debt collection. People are asking for an extension on their payments, which are overdue,” said Brian Mageka, who is also part of the chama.
The boda boda riders are just a fraction of Kenyans struggling to get by and service their loans since coronavirus landed on the Kenyan shores in March last year.
The pandemic has shuttered every sector of the economy, rendering millions jobless.
At the height of the pandemic last year, banks allowed individuals and businesses to restructure their loans in a bid to lessen the economic burden occasioned by the virus.
But over a year after the pandemic struck and the economy reopened, many Kenyans such as the Syokimau boda boda riders are still in financial doldrums and now depend on loans, mainly from the ubiquitous digital lenders to get by.
“I have loans with all the digital lending agencies; for instance, I take a loan from Branch to pay Tala,” said Mageka.
“The most important thing is to ensure you protect your credit score because my life revolves around these loans,” he added.
Commercial banks had 3.9 million mobile loan accounts as of April this year, with Kenyans borrowing about Sh50.6 billion ($468.5 million), according to the Central Bank of Kenya (CBK).
Unregulated lenders In comparison, the CBK boss said, unregulated digital lenders had disbursed loans estimated at Sh4 billion.While unsupervised lending from the digital lenders accounted for less than one per cent of the banking sector’s 3.2 trillion-shilling loan book, about two million people use them, on average eight times a year, according to Dr Njoroge.The latest data from the regulator showed that a majority of Kenyans, especially the youth are surviving on debt, sometimes borrowing from one digital lender to pay off another.“According to the survey data that we have, about 8.3 per cent, or two […]
