No, Kenyans haven’t been ordered to stop repaying loans from mobile lending apps

This article is more than one year old.
Published on July 18, 2019 at 12:19
2 min read
By AFP Kenya, Mary KULUNDU

Posts claiming that a government minister has instructed Kenyans to halt loan repayments to five mobile lending companies have been shared widely on social media. According to the posts, Interior Cabinet Secretary Fred Matiang'i made the order after claims that the apps lacked the proper licences to operate in Kenya. However, a ministry spokeswoman told AFP she was not aware of any such ‘pronouncement or action’ by Matiang’i.

An article published on the website hivipunde.com, which we’ve archived here, claimed Matiang’i had asked Kenyans not to repay loans to five companies -- Branch, Tala, Opesa, Okash and Zenka -- “as they operate illegally in the country”.

“We are urging the public not to clear the existing loans until a case is determined on how the Mobile lending apps acquired licences to operate. We are doing everything humanly possible to ensure that all business operations in the country follow the law," the website quoted Matiang’i as saying.

The false article on hivipunde.com, seen in a screenshot taken on July 18, 2019

According to social media analysis tool CrowdTangle, the article was shared more than 150 times. Other articles with similar claims were published here and here.

In fact, it’s a screenshot of the headline from that final article -- published on the website Butwaa.com -- that appears to be circulating most widely.

One of the Facebook posts sharing the false claim, as seen in a screenshot taken on July 18, 2019

It was posted on numerous Facebook pages, including Group Kenya, a public Facebook group with more than two million members. The post was shared more than 90 times, accruing more than 2000 comments and reactions.

“Kenyans,.......early xmas. Dr. Matiangi for president, “ the caption on the May 21, 2019 post reads.

We’ve archived a few other Facebook posts that shared the screenshot of the article here, here and here.

Some online users appeared pleased by the supposed order from Matiang’i to halt their loan repayments, while others questioned whether the article was accurate.

But Wangui Muchiri, spokeswoman for Matiang’i’s ministry, said he had made no such order.

She told AFP via WhatsApp message that she was “unaware of such pronouncement or action” by the minister.

The central bank wants mobile lending apps to be regulated

The Central Bank of Kenya (CBK) has been pushing for the regulation of mobile lending services, accusing them of charging Kenyans exorbitant interest rates. Tala, for instance, charges 15-percent interest on a 30-day loan, and 11 percent on 21-day loans.

As reported by local media last week, CBK governor Patrick Njoroge singled out three such apps -- Tala, Branch and Okash -- while giving evidence to a parliamentary committee, saying they could easily be used to launder illicit cash.

In July 2018, the CBK, the ministry of trade and four other institutions issued a statement warning Kenyans of the emergence of unlicensed and unregulated financial services and products available online.

But there has been no instruction from the government for Kenyans to stop paying off loans they have already taken out via mobile lending apps.

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