Mobile lenders have been urged to increase credit access to the informal sector with experts saying such a move by existing providers would go a long way in supporting underserved livelihoods like the Juakali sector.
Initially, the mobile lenders existed independently, and regulation was a challenge. But as mobile lending becomes established, we are seeing a more robust drive for self-regulation through the Digital Lenders Association of Kenya (DLAK) that was formed last year. This has brought stability and certainty in the industry.
The entrepreneurship journey is extremely lonely, and many people sacrifice a lot, including friendship and even marriage to come on top of things. Most time is spent looking for capital. The simplest way to weed out those lenders who avoid meeting the required standards is to verify the list of lenders associated on DLAK’s website (the Digital Lenders Association in Kenya), as its members comply with the agreed Code of Conduct.
In most entrepreneurship forums, majority of motivational speakers invariably overlook or underplay the role of capital in starting a business. The common rider always is, “get a business plan, a strategy and everything else will fall into place.”
The establishment of Digital Lenders Association of Kenya (DLAK), in June 2019, came at an opportune time, to help in the regulation of the digital lending sector. Over the last few years, mobile loans have become an alternative source of capital for Small Medium Enterprises (SMEs) as well individuals, without the headache of a collateral. A good credit history was enough to be granted a loan.
Digital Lenders Association of Kenya seeks tighter digital loan guidelines. “We strongly believe that close cooperation between leading lenders and regulatory bodies will reinforce the financial market in Kenya and boost its development in the right direction,” commented Duncun Motanya the Chief executive of Zenka Finance, a digital lending institution.
Digital Lenders Association of Kenya (DLAK) wants Central Bank and the National Treasury to tighten guidelines and regulations to shield consumers from rogue mobile lenders using the regulatory vacuum to swindle cash and personal data from unsuspecting users.
Digital Lenders Association (DLAK) has called for stronger guidelines and regulations by the Central bank and the National Treasury in order to shield consumers from rogue mobile lenders using the regulatory vacuum to swindle cash and personal data from unsuspecting users.