The Digital Lenders Association of Kenya (DLAK) has warned mobile loan borrowers to be wary of fake money lending apps that have flooded the market.
According DLAK, a body that brings together a number of leading digital loan providers in Kenya, rogue mobile phone lenders have flooded the arena some even using similar names as genuine lenders.
The organisation has come up with guidelines as a way of helping thousands of digital borrowers identify these fake apps and to avoid being swindled.
"If you happen to bump on an app that is asking you to pay registration fee or what most call CRB fee beforehand, it's not a genuine app," says DLAK on its website.
Easy application procedure where the loan app doesn't bother to ask much details or creditworthiness is also a red light.
These fake apps also provide phone contacts that doesn't work as well as fake physical addresses. Genuine apps operate 24/7 and are reachable on phone at any time.
Fake ones also operate like pyramid schemes. For instance most of them will insist that when a borrower refers them to other potential borrowers, they will get points that will enable them to secure their first loan.
Once a borrower sends a fee of between Sh200 or Sh400 that most of these apps ask for, they ensure they can no longer log into the app using the information you registered with.
Launched early this year, DLAK objective is to set ethical and professional standards in the industry, to collaborate with policymakers and other stakeholders in addressing issues and to contribute to knowledge and to drive overall growth of the fast growing digital lending industry.
A few months ago the organisation launched an online platform for borrowers to lodge their complaints.
Currently DLAK has 11 members that include Tala, Alternative Circle, Stawika Capital, Zenka Finance, My credit, Okolea, Lpesa, Kopacent, Four Kings Investment, Kuwazo Capital and Finance Plan. It's membership is growing and DLAK says new applications are under consideration.