The central bank of Kenya is putting forward new legislation to govern rates of interest charged for digital lenders' loans. Online lenders will need the green light in the central bank to unveil new offerings or hike lending rates when the legislation is defined into law, Quartz Africa reported.
Online lending has taken in regards to a quantity of complications in Kenya, with digital loans reportedly leading rising personal debt for users in the country. It has been reported that digital lenders use ways to get individuals to pay back loans such as messaging numbers inside a debtor's contact book.
Traditional financial institutions mandate that borrowers put up property to back their loans and consume a procedure that involves significant documentation. By contrast, online lending apps provide fast loans and ascertain if someone should receive a loan by browsing phone information for example bank balance messages and call records.
This kind of service has gotten momentum from individuals in the middle class and those who make modest incomes
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