Browsing: Bank account

While digital lenders in Kenya have agreed that Kenyans indebted to more than one mobile lending application will no longer continue accessing loans from multiple lenders, the tables are turning.

In what could be a silent coup against these lenders, Kenyans feel that the tactics used by some of them to recover debt are overboard and breach barriers which should not be broken.

The Digital Lenders Association of Kenya’s (DLAK) desire is to have Credit Reference Bureaus (CRB) put in place a mechanism that will enable DLAK’s members to acquire a borrower’s credit history in real-time. The target is to lock out borrowers with poor credit scores if the proposal sails through.

Hostile treatment

However, while this has been done, borrowers feel that some of the lenders have been going overboard and even breaching privacy in their loan recovery mechanisms.

According to Ajua, an Integrated Customer experience company, Kenyans want …

Low-income households are active financial managers, constantly trading-off the need for short-term liquidity and making long-term investments in the future.

To achieve their money management goals, households use a wide variety of complementary tools, constantly shuffling money into and out of financial devices.

From an FSD Kenya report in 2014 titled, Kenya Financial Diaries: Shilingi kwa shilingi-the financial lives of the poor, poor households make many small value transactions making dealing with cash well suited and less problematic than a conventional bank account.

This effectively makes a bank account unattractive to households with limited cash flows and locks out many from operating one.

The Cost of banking

According to FSD Kenya’s, Cost of banking, 2018, many of the familiar benefits put forward for adopting formal financial services (banks included) for day-to-day money management are only persuasive in different contexts.

For poor households, the cost of running an account makes …