Borrow money from Opesa and Okash mobile phone lenders at your own risk. This is the message that was delivered by the Digital Lenders Association of Kenya (DLAK) this week.
The association of lenders said this as it distanced itself from from the two mobile lenders who have reportedly resorted to shaming their borrowers in public over delayed payments and default.
The DLAK said that Opesa and Okash have been invading customer privacy which is against the Kenyan data protection laws. “Not only does this behavior go against Kenyan data protection laws, but it reeks of indignity. By reaching out to a customer’s contact list, Opesa and Okash rob the individual of basic dignity and consumer rights,” the association said in a statement.
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The two mobile lenders have apparently been fishing customers contacts. Once a borrower fails to pay up, they start calling people in the contact list to tell them about the borrower’s default in a bid to get repaid. “This can have long term effects on their psychological well-being and damage relations that may have taken years to build,” Robert Masinde, the chairperson of the DLAK association said.
The association includes digital lenders such as Tala, Alternative Circle, Stawika Capital, Zenka Finance, MyCredit, Okolea, LPesa, Kopacent, and Four Kings Investment. A large number of these lenders have suspended lending due to fears that borrowers may default as a result of coronavirus.
In April this year, the Central Bank of Kenya (CBK) ordered digital lenders to stop listing borrowers with the Credit Reference Bureaus (CRB). The CBK also ordered the delisting from CRB of over one million Kenyans. The order demands that Kenyans with loan defaults of less than Sh. 1,000 be removed from the CRB. The move came a few weeks after it was revealed that the number of Kenyans listed on credit reference bureaus has hit 3.2 million. This was a jump from the 2.7 million Kenyans who were listed in the CRB last year. The listing in the CRB represented a 12 per cent rise in non-performing loans in Kenya up from 9.5 per cent in the year 2017.
