It’s a central part of a survival strategy. But sadly, what was marketed as financial incorporation has morphed into a financial chokehold.
Unregulated lenders have perfected the art of fleecing the desperate. They entice distressed customers with quick cash, then hide behind opaque fees, rollover charges and interest rates that can make a hardened shylock shudder.
When the borrower defaults on a Sh5,000 loan, the game of shame and humiliation kicks in with distraught calls to family members, colleagues at work or in business, threats, and, for logbook and phone-financed loans, rough treatment only thugs can conjure.
This trend betrays the lenders for who they actually are – wolves wearing sheep’s skin.
It is reassuringly welcome that MPs have finally, thanks to Kisumu West MP Rozaah Buyu, focused on immoral conduct and begun the process of reining in lenders who do not want to play by the rules.
One of the changes they ought to introduce is to ensure that rules which regulate banks also apply to the mobile lenders.
There must be compulsory disclosure of the real interest, a ceiling on charges and humane debt collection under the supervision of the Central Bank of Kenya.
The rules should not stifle business. The rules should promote fairness and end exploitation. If you lend in the fashion of a bank, you must play by the rules of a bank.
Quote of the Day: "I have always served the public to the best of my ability. Why? Because, like every other man, it is to my interest to do so.” —American business magnate Cornelius Vanderbilt completed his voyage around the world aboard his private yacht North Star on September 24, 1853
