Loan caps boost micro-lenders’ dig in sector

In summary

  • Interest rate capping regime played a major role in the influx of mobile lending platforms keen to finance small-scale borrowers after conventional lending institutions were labeled “risk-averse”.
  • Jijenge Credit has more than 5,000 active clients with a collective clientele of more than 20,000 and a five-year future target to expand into deposit-taking.
  • The number of transactions has grown even faster, doubling from 56 million in 2012 to 155 million in 2018.

Micro-lenders are banking on the weakening strength among low-tier banks to deepen presence in the sector.

They say they have seen a growing demand for services, which informs appetite for horizontal growth.

Jijenge Credit managing director Peter Macharia said yesterday, on the sidelines of a banking stakeholders’ forum in Nairobi, that interest rate capping regime played a major role in influx of mobile lending platforms keen to finance small-scale borrowers, after conventional lending institutions were labelled “risk-averse”.

“We have seen a consistent gradual upsurge in the number of loan applications in the last few months and by setting up another outlet, we seek to meet this demand while at the same time addressing the financing hurdles facing our borrowers,” said Macharia.

The firm, which specialises in mobile lending, will next month open its second Nairobi outlet as it banks on roping in borrowers from urban centres keen on securing fast and quick loans.

Huge clientele

Jijenge Credit has more than 5,000 active clients with a collective clientele of more than 20,000 and a five-year future target to expand into deposit-taking.

The company specialises in title deed, check-off and school emergency loans, import duty finance, LPO financing, bid bonds as well as asset financing among others.

Statistics on the sector show that since the first mobile lending platform, M-Shwari by CBA and Safaricom, was set up in 2012, the value of mobile payment has surged by 128 per cent to hit Sh343 billion as of December last year from Sh150 billion six years ago – with this number expected to rise by year end and beyond.

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