This archive report was first published on 22 October 2019.
As the festive season approaches, a new survey has revealed a surge in loan uptake through digital platforms, with logbook loans being one of the most popular options. According to a study by Jijenge Credit, despite tough economic times in 2019, December and January are expected to be the months when high spenders turn to online borrowing.
“In the next few weeks, we expect to see an increased number in loan uptake and the demand for such quick loans will continue to increase until the first quarter of 2020,” said Peter Macharia, CEO of Jijenge Credit. The lender is calling for tighter regulation in the digital lending sphere, including increased surveillance in terms of credit checks on borrowers.
Mr. Macharia noted that one of the most popular loans being absorbed by borrowers is the logbook loan, which can account for up to 50% of a car’s value. Borrowers are taking these loans to pay school fees for their children and finance holidays.
“Digital lending is fast and efficient, with less paperwork required. However, this also means that credit checks are not thoroughly done before disbursing funds,” said Macharia. He added that background checks on borrowers are also not thoroughly done, like in the case with banks.
