Tough times as value of doubtful, lost loans hits Sh315 billion

The value of loans classified as lost, doubtful and substandard increased by 16.5 percent to Sh314.6 billion in 2018 from Sh270 billion a year earlier, highlighting the daily struggle of Kenyans navigating the tough economic times. The value of loans classified as lost rose fastest by 45 percent from Sh42.3 billion in 2017 to Sh61.2 billion last year. Lost loans are debts which have generally remained unserviced for 360 days or more after due date. “The increase in non-performing loans’ categories were occasioned by deteriorating asset quality as a result of delayed payments, enhanced reclassification and provisioning of loans and

KCB fintech staff leave for Singapore to hone skills

The region’s largest lender KCB Group  has sent its digital team to Singapore to boost the development of financial technological (fintech) products that improve services to customers. The lender’s acting digital financial services and mobile banking head Alex Siboe said the mission is to inform future engagements with customers via newly formulated globally competitive products. “To offer suitable products for our current customers to meet their needs, we are boosting our capacity to develop tech-based products that are built around people’s lives and human needs,” he said. Mr Siboe, who is also KCB’s head of projects spoke in Nairobi as the

Mobile phone loans raise CRB reports 181pc

Requests by banks for loan repayment reports from credit reference bureaus (CRBs) jumped nearly three-fold to 12.40 million in the race to shield lenders from defaults, especially on short-term mobile phone-based credit. Central Bank of Kenya (CBK) data shows that requests for loan reports from the CRBs rose by 181.1 percent last year—marking the fastest jump since the introduction of the bureaus in 2010. The increased use of the reports is linked to the sharp rise in supply of “soft” loans given through mobile phone platforms. The rising appetite for digital loans has led tens of unregulated microlenders to invade

Algorithms are making the same mistakes assessing credit scores that humans did a century ago

Money2020, the largest finance trade show in the world, takes place each year in the Venetian Hotel in Las Vegas. At a recent gathering, above the din of slot machines on the casino floor downstairs, cryptocurrency startups pitched their latest coin offerings, while on the main stage, PayPal President and CEO Dan Schulman made an impassioned speech to thousands about the globe’s working poor and their need for access to banking and credit. The future, according to PayPal and many other companies, is algorithmic credit scoring, where payments and social media data coupled to machine learning will make lending decisions that another enthusiast

Could personal loans from fintech firms give credit cards a run for their money?

Startups have spent the past decade trying to reinvent everything from taxis (so far so good) to squeezing juice out of fruit and vegetables (facepalm). Lately, entrepreneurs have been giving consumer debt a digital makeover. Fintech upstarts have turbocharged personal loans, now the fastest growing category of consumer debt, according to Experian. This type of lending was once mainly used by riskier borrowers without access to credit cards or home-equity loans. Now, whizzy smartphone apps, using a wider range of of data inputs, can extend loans to people who might not qualify based on traditional credit scores alone. Companies like Affirm and Marcus (part

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