Entry Instance

HTTP 200 OK
Allow: GET, PUT, PATCH, DELETE, HEAD, OPTIONS
Content-Type: application/json
Vary: Accept

{
    "id": 904299,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/904299/?format=api",
    "text_counter": 38,
    "type": "speech",
    "speaker_name": "Sen. (Dr.) Milgo",
    "speaker_title": "",
    "speaker": {
        "id": 13174,
        "legal_name": "Milgo Alice Chepkorir",
        "slug": "milgo-alice-chepkorir"
    },
    "content": "Thank you, Mr. Speaker, Sir. The rise of the digital credit market has raised concerns about the risk of excessive borrowing and over-indebtedness among lower income households because these loans are easy to obtain; they are short term, carry a high interest rate and are available from numerous banking as well as non- banking institutions. This growing unhealthy appetite for quick loans is best illustrated by the phenomenal growth of „Fuliza‟ ; the new Safaricom overdraft platform which, within a month of its launch, had splurged Kshs6.2 billion; Kshs29 billion in three months and a whopping Kshs45 billion in six months to borrowers. What makes the credit situation serious is that a majority of those who have developed a huge appetite for borrowing through the multiple mobile phone-based platforms are jobless youth and low-income earners who either do not have clear repayment plans or only have irregular income. It is a big concern that most of these vulnerable borrowers usually need a quick fix for food, housing, school fees and even betting. If not kept in check, the situation will soon reach boiling point, given that an average Kenyan these days has at least five or more accounts, ranging from the banks, Savings and Credit Co-Operative (SACCOs) and a number of mobile phone–based platforms. Some of these Kenyans accumulating debt and are unable to repay may soon find themselves uncreditworthy. According to the Kenya National Bureau of Statistics (KNBS) and other stakeholders, there are indications that the borrowed money is mostly used for consumerism; borrowing to spend on food, recreation and other basic recurrent expenditure and not for investment, hence the consumers of such credit do not get value from what they borrow. There is an emerging trend of many borrowers resorting to dodging their financiers and even worse, in a typical survival tactic of robbing Peter to pay Paul; borrowing from one platform to pay another. Others take flight from the creditors by registering multiple mobile numbers for use when they feel cornered by their creditors. Therefore, many of the vulnerable have found themselves blacklisted because of poor credit scores. My appeal, therefore, is that- (1) This House urges the Government to regulate these mobile lending platforms. (2) An oversight authority be formed or created that would have the mandate to scrutinize the lucrative interest rates and penalties applied by the digital loan providers with a view to putting in check predatory lending practices. (3) A consumer awareness and education programme be put in place to create awareness on the cost of digital credit and terms and conditions of the loans as well as to train the populace on the effective use of credit from such facilities. The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor, Senate."
}