This archive report was first published on 10 December 2019.
On December 10, 2019, the Digital Lenders Association of Kenya (DLAK) sounded the alarm on a growing threat in the digital lending industry: fake mobile loan apps.
According to DLAK, rogue mobile phone lenders have flooded the market, some even using similar names as genuine lenders. To help thousands of digital borrowers identify these fake apps and avoid being swindled, the organisation has come up with guidelines.
"If you happen to bump on an app that is asking you to pay registration fee or what most call CRB fee beforehand, it's not a genuine app," DLAK advises on its website.
Other red flags include easy application procedures where the loan app doesn't bother to ask much details or creditworthiness, and fake phone contacts or physical addresses. Genuine apps, on the other hand, operate 24/7 and are reachable on phone at any time.
DLAK also warns against fake apps that operate like pyramid schemes, where borrowers are promised points for referring others in exchange for a loan. Once a borrower sends a fee, these apps often ensure they can no longer log into the app using the registered information.
Launched early this year, DLAK's objective is to set ethical and professional standards in the industry, collaborate with policymakers, and contribute to the growth of the digital lending industry. The organisation has already launched an online platform for borrowers to lodge their complaints and has 11 members, including Tala and Alternative Circle.
