Mobile lenders drive microfinance entities to early grave

Janet Akinyi, a mama mboga (greengrocer) in one of Nairobi’s low-income suburbs, is neck-deep in debts which she incurred from the myriad mobile lending platforms that seem to mushroom with every crack of dawn.

Yet, unlike some few years ago, she is not worried.

In 2010, she had a similar experience. Only then, instead of mobile loans, she was drowning in a pool of debts she secured from various microfinance institutions (MFIs). Just as in the current mobile phone debt imbroglio, she borrowed from one MFI to repay another one. But this was not sustainable in the long-run and she defaulted.

From then on, she would spend most of her days hiding from different ‘loan sharks’ who were always accompanied by mean-looking auctioneers whose appearance betrayed their darker side than the lenders’ noble intentions of getting their money back.

Her heart jumped to her mouth every time she heard a knock on her door. “At some point, with the high blood pressure getting worse, I was advised to go into hiding,” she remembers. Akinyi’s predicament was not unique.

The zenith of microfinance lending in Kenya, as perfected by institutions such as Kenya Women Microfinance Bank saw many poor borrowers saddled with untenable debts.

Read More : Courtesy of Standard Media Group