Digital lenders eye festive period spike

Digital lenders expect a spike in the coming weeks up to early next year as Kenyans seek short-term loans for the festive season.

Jijenge Credit Chief Executive Peter Macharia said the need for quick loans to pay for holidays ahead of Christmas and New Year festivities and school fee would fuel demand.

“In the next weeks we expect to see an increased number in loans uptake and the demand for such quick loans will continue to increase until first quarter of 2020,” he said.

Mr Macharia, however, urged digital lenders to increase background checks on borrowers to cushion themselves from those already saddled with unpaid loans.

The anticipated rise comes as households and small businesses continue to struggle in accessing credit.

The interest rate cap that kept off retail borrowers was, however, scrapped last week after MPs failed to overturn President Uhuru Kenyatta’s recommendations to abolish the cap.

The borrowers had increasingly turned to digital apps in the wake of the credit squeeze by banks.