Nairobi ranked top fintech city in Africa
Stakeholders in the micro-finance sector are urging the government to come up with an elaborate plan on how they will deal with loan defaulters.
The lenders said they are losing millions of shillings due to a lack of a plan that will help get data of those listed on the Credit Reference Bureaus (CRBs).
We were extending credit averaging millions pre-Covid but our loans went down by more than 50 percent in 2020 due to the new government regulations put in place to regulate digital money lending," said CEO Bidii Credit Geoffrey Wandeto.
Last year the CBK revoked the approval of digital lenders to share data and exempted those who had borrowed less than Sh1,000, which was expected to bring the number of negatively listed borrowers down.
The move barred 337 unregulated digital mobile lenders from forwarding the names of loan defaulters to CRB
Wandeto said if a serious action is not taken seriously most SMEs in the country will lack starting capital as no lender will be willing to lend to them.
“We are the people who deal with Kenyans at the grassroots but it’s sad that our government seems not to care about it. We are willing to have talks that will help us come with the way forward,” he said.
According Wandeto most Kenyans despite being a waiver period last year is yet to pay back their loans.
His remarks came amid worrying statistics which revealed that 14 million Kenyans have already been blacklisted by the CRB.
The blacklisted accounts jumped by a significant 45 percent in the five months between August and January after the Central Bank of Kenya (CBK) lifted a three-month moratorium.
Further, Wandeto challenged Small and Medium Enterprises (SMEs) to formalize their businesses to enable them to earn economic benefits that include getting a stake in public procurement processes.
Wandeto said the economic environment was tilting in favour of SMEs hence the need for formalisation and compliance by the sector.