This archive report was first published on 5 December 2019.
Published on December 5, 2019, a report by CreditInfo Credit Referencing Bureau (CRB) has shed light on the worrying trend of loan defaulters in Kenya.
The report found that a staggering 70% of mobile loan defaulters are likely to borrow again and default, a number that is higher compared to traditional bank borrowers.
Between November 2018 and April 2019, the number of defaulters with new loans increased to 398,160, a significant jump from 115,869 people in the previous period.
Interestingly, banks account for 93% of all mobile loan issues, highlighting the challenges faced by lenders in recruiting new borrowers.
However, lenders are awarding better-graded borrowers with higher loan amounts, a move that may help to reduce the default rate.
Older borrowers have proven to be better debtors compared to the youth, while male borrowers have been reported to be more active in borrowing compared to women.
The default rate for three-month loans stands at 10%, equivalent to Ksh 1.8 billion.
CRB faced a challenge in identifying gaps in the credit sector due to the limited number of digital lenders that shared their loan contracts, with only 15 out of hundreds of mobile loan issuers participating.
