NAIROBI, Kenya, Jul 12 – Digital lenders have downplayed fears majority of borrowers accessing mobile loans are using them for betting purposes.
Tala East Africa Regional Manager Ivan Mbowa who is a member of the Digital Lenders Association of Kenya says majority of the consumers seek credit to fund their businesses.
“Our research has shown that majority of consumers are using digital credit for investment purposes such as buying goods they need to stock goods for their shelves and just build their business overtime,” he says.
In April Interior Secretary Fred Matiang’i announced the looming enactment of tough laws intended to curb rampant betting across the country.
Matiangi said over half a million youth had been blacklisted by various lending firms after defaulting on loans they acquired to place bets on online gambling platforms.
He added that industry statistics paint a grim picture of addictive betting that has caused social strife, financial ruin and even suicides.
“We have about 500,000 of our young people who are blacklisted by some of the lending agencies, because they borrowed and cannot pay,” he said.
A study conducted by Geopoll revealed 76 per cent of those Kenyans engaging in betting were aged below 35 years but ended up defaulting.
A 1966 law that governs the betting industry has been outdated with the evolution of the technology and processes around gambling.
The weak legislation has left the youth exposed to negative impact of betting without adequate legal protection.
Kenya’s leading betting company SportPesa said it welcomed Matiang’i’s plan to reform the sector.
According to Geopoll, Kenya has the highest proportion of youth engaged in betting in Africa at 76 percent.
They spend an average of Sh5,000 per month, mostly on football bets.