Financing Bad Credt

The uptake of digital lending has been on the rise across Kenya, boosted by growing smartphone adoption and the availability of mobile money transfer systems like M-Pesa. With quick application turnaround, digital credit has helped borrowers pay for basic necessities like food and rent and access working capital for their enterprises. Yet increasingly, digital lending in Kenya—and across East Africa—has come under scrutiny, criticized as a “catastrophic” industry that’s pushing tens of thousands of users into debt, while commodifying their data and gaining profits from their woes. The latest challenge comes from Google, which has updated its app store developer policies to curb predatory lending practices. In late August, the company announced it will not allow apps that promote personal loans which require repayment in full in two months or less from the date the loan was issued. The move has heralded an uncertain future for many lenders who say they don’t understand if the