NAIROBI, Kenya, June 9 – The Kenya Digital Lenders Association has distanced itself from two online lending operators over disgraceful debt practices to borrowers who fail to repay their loans.
In a statement released on Monday, members said Opesa and Okash are known to have invaded a client’s privacy, which violates Kenya’s data protection laws and has further damaged the reputation of digital lenders in the country. Kenya.
“Not only does this behavior violate Kenya’s data protection laws, it smacks of outrage. By accessing a client’s contact list, Opesa and Okash deprive the individual of their basic dignity and consumer rights, ”the statement from DLAK reads.
According to DLAK, consumers of the Okash and Opesa mobile app who have delayed or defaulted on their loans often ask lenders to contact the people on their contact list with the aim of recovering the funds.
“This can have long-term effects on their psychological well-being and damage relationships that may have taken years to build,” said DLAK President Robert Masinde.
DLAK members include Tala, Alternative Circle, Stawika Capital, Zenka Finance, MyCredit, Okolea, LPesa, Kopacent, Four Kings Investment, among others.
Last year, members launched a regulatory program that they believed was in the best interests of consumers.
One of the resolutions was to ensure that consumers enjoy data privacy when digital lenders collect personal data only relevant to the services provided and for which the borrower has given express permission.
The announcement comes at a time when digital lenders have long been accused of charging high interest rates, using crude methods to collect loans, and predatory lending tactics by offering loans to borrowers without the means to pay. refund.
Several unregulated micro-lenders have invested in the Kenyan credit market in response to growing demand for quick loans.
In April, the Central Bank of Kenya banned unregulated digital mobile lenders from submitting the names of defaulting lenders to credit reference bureaus.
The directive also affected DLAK members who already have a regulatory framework.
Currently, CBK Governor Patrick Njoroge announced at the MPC meeting last month that lenders are now engaging with the regulator for a framework to protect borrowers from mistreatment by lenders in line.
Millions of Kenyans have been listed on credit reference bureaus by digital mobile lenders for loans as low as Sh500.