CreditInfo Credit Referencing Bureau (CRB) has recently released a report with data about loan defaulters. The report states that about 70% of mobile loan defaulters are likely to borrow again and still default. The number is higher compared to traditional bank borrowers.
The number of defaulters with new loans increased to 398,160 between November 2018 to April 2019. This was an increase from 115,869 people.
Banks account for 93% of all mobile loan issues. There has been a challenge in recruiting new borrowers over a period of time. However, lenders are awarding better-graded borrowers with higher loan amounts.
Older borrowers have proven to be better debtors compared to the youth. Male borrowers have also been reported to be more active in borrowing compared to women.
The default rate for three-month loans is at 10% or an equivalent of Ksh 1.8 billion.
The challenge that CRB had with the report is that only 15 digital lenders out of hundreds of mobile loan issuers, shared their loan contracts. Thus CRB was unable to identify gaps in the credit sector.