Loans Through Mobile Phones Cut in Half in Kenya, KCB Bank Says
Loans Through Mobile Phones Cut in Half in Kenya, KCB Bank Says
Kenya’s second-biggest bank said loans issued via mobile phones almost halved in the first six months of the year, indicating that the fallout from the coronavirus pandemic is hitting lower-income earners hardest.
Monthly disbursements by KCB Group Plc averaged 4 billion shillings ($36.9 million) to 5 billion shillings, down from 7 billion shillings to 8 billion shillings before the outbreak, and defaults have more than tripled, according to Chief Executive Officer Joshua Oigara.
Many of the bank’s mobile loan customers are from the informal sector. “Because we are not providing any moratorium or extensions to them, then they are facing problems of payment,” Oigara said in an interview Thursday.
In addition to booking fewer mobile loans, KCB is losing as much as 150 million shillings monthly after the central bank waived costs for many mobile-banking transactions.
Still, the lender forecasts overall loans will grow by about 10% this year, boosted by demand from the manufacturing, transport, trade, retail and construction industries, Oigara said.
Read more: KCB Group 1H Profit Plunges 40% After Tough Second Quarter
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