Tala and Branch are mobile-based lenders that advance loans to borrowers through mobile apps.
Fuliza is a service that allows a person to complete mobile money transactions even if they don’t have enough funds in their mobile money account.
M-Shwari is another mobile product that allows its customers to save and borrow money.
According to the article published on the Nipashe News website, the four mobile lenders have announced “they will partner with police and other crime busters to hunt down over 1.5 Million loan defaulters across the country”.
We investigated if this was true.
Nipashe News article untrustworthy
The Nipashe News article is sloppily written, with a number of grammatical errors and incoherent sentences. This is often an indication that a news source is not trustworthy.
The article also refers to the “Loans Regulator Board”, but there is no such institution among Kenya’s financial regulators.
Mobile lenders’ responses
Tala’s East Africa marketing director, Kevin Kaburu, told Africa Check that “this post is false and inaccurate”.
“Loan defaulters, post the grace period and the late penalty fee period, move into our collections unit who engage in conversations with the customer with the view to help in the repayment,” he said.
After this step Tala “submit the defaulters’ names to the credit reference bureau”.
Fuliza and M-Shwari are both owned by Safaricom. Dennis Mbuvi, a communications business partner at the company, told us: “This is false as failure to pay a loan is not a criminal offence, and hence does not involve the police.”
Branch have yet to respond to our enquiries, but we will update this report once they do.
On their website Branch notes: “If you are very late on your payments, we report to the Credit Reference Bureau (CRB). Blacklisting by the CRB may affect your ability to borrow from other lenders.”
There is no evidence and no reporting by any trustworthy news sources that Kenyan police will start arresting mobile loan defaulters. – Grace Gichuhi
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