Lender: High cost of living drives surge in digital loans

The rising cost of living continues to push many Kenyans into digital borrowing, with some falling into the hands of predatory lenders who resort to aggressive recovery tactics, including persistent calls to borrowers and even their contacts.

For some, the experience has been deeply distressing. Sammy Wanjohi recalls how his marriage was strained after his mother-in-law was contacted over a loan he had taken from a digital lender.

“I was surprised she knew I had taken a loan. She called me and said, ‘dawa ya deni ni kulipa’. At first, I didn’t understand her and thought she was asking for money,” he said.

Wanjohi later discovered the lender had been contacting his relatives after he defaulted on a loan of about Sh8,500 by a few days.

“She called again the next day, this time angry, saying I should not involve her in my financial problems,” he said, adding that the incident made him swear off digital loans entirely.

Concerns over such practices were echoed by Unifi Kenya’s Gloria Kamotho, who said harassment of borrowers or their contacts should not happen.

“That is why we have physical offices across the country. We believe these offices build trust between us and our clients,” she said.

Kamotho said demand for digital loans is largely driven by economic pressure, noting that rising fuel and living costs continue to strain households.

“Life is happening, and that goes without a doubt. That is why Unifi is happening. We are trying to make life easier for Kenyans so that in between the month they can meet needs like school fees or transport,” she said.

Speaking during the opening of Unifi Kenya’s 10th branch at the Mombasa Trade Centre, country manager Gys Steyn said the company aims to expand access to credit while maintaining responsible lending practices.

“We are on a mission to redefine credit in Kenya,” Steyn said.

He said Unifi focuses on formally employed clients and offers a salary advance product. Applicants must first apply in person at one of its branches before accessing services through its mobile platform.

“You only need a payslip, a bank statement and a national ID card. We also contact your employer to confirm employment status,” he said.

Steyn said the company is regulated through the Credit Reference Bureau (CRB), where all client data is shared.

“We report all our clients to the CRB, both good and bad. If you default and later apply for a loan elsewhere, it will reflect,” he said.

He said the firm does not engage in harassment, noting that digital credit providers are expected to follow regulated recovery processes.

Kamotho said Unifi’s approach is designed to avoid trapping clients in debt cycles.

“We are offering that support that can take you to the end of the month. We are not looking at catching you in some form of predatory debt cycle,” she said.

Kamotho noted that delayed salaries and financial strain have increased demand for short-term salary advances across the country.

Mombasa county trade executive Mohamed Osman welcomed the firm’s expansion, saying it reflects confidence in the county’s business environment.

“This means people in Mombasa have financial solutions during these hard economic times,” he said.

He said the county government is committed to supporting investors and creating a conducive environment for business growth.