Why Kenyan Borrowers Aren’t Scared of Defaulting on Mobile Loans
By Otiato Guguyu
Majority of Kenyans borrowing loans from mobile phones do not believe they have to pay back, a situation that is troubling banks venturing in this lucrative but risky segment.
According to the Central Bank of Kenya’s Financial Sector Stability Report, Non-Performing Loans (NPL) ratio for digital loans extended by banks is higher than that of the entire bank loan portfolio.
Latest data shows that for every Sh100 being borrowed today, Sh11.4 goes unrepaid, painting a picture of a nation whose citizens do not repay their debts.