The phrase ‘Hata Kenya iko na deni’ loosely translated to mean ‘even the country called Kenya has debts’ has gained popularity among Kenyans, often used when individuals are unwilling or unable to repay loans.
Majority of people are burdened with long-standing debts, and appear to lack concrete plans for repayment.
Mobile lending applications have gained immense popularity in the country, following the success of Mshwari, which was launched in 2012.
With challenges faced by the high cost of living many have found refuge in these lending apps.
Kenya’s Central Bank disclosed that as of November 2022, approximately 14 million mobile accounts had been flagged for defaulting on digital lending apps.
The bug of accumulating debts without intention to repay appears to have hit on some Kenyans.
Numerous Kenyans have become desensitized to persistent calls from loan agents demanding repayment.
The launch of free phone lines by Safaricom has allowed many Kenyans to avoid these calls, either by abandoning the lines they owe money on or using them only sporadically.
A significant portion of Kenyans has effectively evaded the threat of being listed in the Credit Reference Bureau (CRB) by continuing their transactions normally, rendering CRB listings less impactful.
Fuliza introduced an understanding of the Kenyan situation and implemented an increase in daily interest rates for defaulters, swiftly deducting owed amounts.
However, despite such measures, majority of Kenyans continue to default on their payments, opting for alternative methods to receive funds, such as sending money to a friend’s phone to avoid Fuliza deductions, or resorting to cash transactions.
Unlike individuals from other nations who might be apprehensive about being in debt, many Kenyans do not seem to be concerned, considering the overall economic condition of the country.
For those who have no aspirations of traveling abroad, and with the high unemployment rate, many feel no obligation to repay their loans, arguing that they are unemployed and lack the means to meet the repayment demands.
