Kenyan loans via mobile phones drop 50%, says KCB
Kenya’s KCB Bank says that loans issued via mobile phones almost halved in the first six months of the year, according to Bloomberg.
Defaults have more than tripled, according to KCB’s CEO.
The data indicates that the fallout from the coronavirus pandemic is hitting lower-income earners hardest.
Monthly disbursements by KCB Group averaged KSH 4 billion ($36.9 million) to KSH 5 billion, down from KSH 7 billion to KSH 8 billion before the outbreak.
Additionally, defaults have more than tripled, according to KCB’s chief executive officer, Joshua Oigara.
Many of the bank’s mobile loan customers are from the informal sector. “Because we are not providing any moratorium or extensions to them, then they are facing problems of payment,” says Oigara.
In addition to booking fewer mobile loans, KCB is losing as much as KSH 150 million shillings monthly after the central bank waived costs for many mobile-banking transactions.
Still, the lender forecasts overall loans will grow by about 10% this year, boosted by demand from the manufacturing, transport, trade, retail and construction industries, says Oigara.
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