A few months ago, Beth Nkatha was flat broke. What more, she was living beyond her means.
This is how her story goes. She got ensnared into mobile loans, got hooked, and the next thing she knew she was out of control and the lenders were hounding her incessantly.
Now, she is trying to go back to where it all started, and repay the loans.
"The money is very tempting," says 28-year-old Beth, who lives in Nairobi and works as an accountant and consultant.
Nkatha started borrowing from online lenders in 2018. "I was online when an app popped up on my device. At first, I did not give attention to it but when it popped up again, I downloaded it and ended up receiving Sh1,500 loan. It was all very convenient."
That was also the beginning of what would be a rough road for her. Nkatha found herself borrowing money that she did not even need.
Eventually, she ended up with a loan of Sh25,000. "I sold my gas cooker to settle the debt after the lender called my boss asking her to remind me about the loan," she says.
That's why not so long ago, Beth shared on Facebook on how relieved she was that she was finally paying up the mobile debt. "I am so proud of myself," she narrated.
Some people liked her post but many, in similar circumstances, wanted to know how she had managed to get out of the vicious cycle that is paying and borrowing.
A decade ago, if you needed a loan, you had to go to a bank, a sacco or a shylock who demanded tens of your assets.
At the bank, you would present a bunch of documents, provide collateral and even then, the lender would have to review your income, calculate your debt service coverage ratio and run your credit history.
You then went home to wait as you hoped for the best. The process took time and unfortunately, many people walked out empty-handed.
Things have changed now. With the entry of digital loans, you are just a click away from getting the money you want.
"I like that there is no human element, it is just you and an automated machine. And the feedback is instant," offers Ann Okile, 32, who has an existing loan of Sh3,596 from one of the digital lenders.
The appetite for mobile loans is huge. Think Safaricom, Fuliza, lending Sh6.2 billion worth of credit in one month and Sh200 million daily.
The ease, lack of labels (you get branded when you borrow from family or friends), and the privilege of getting money from a stranger fuel’s the thirst.
For others, the allure of getting what they see as 'available' and 'free' money is tempting.
While the increase of the digital lending apps has made it easy for people to access loans without having to depend on their chamas or friends, it has also exacerbated debt distress.
In a report published by Microsave Consultancy, more than 2.7 million Kenyans have been blacklisted by credit reference bureaus for failing to pay existing mobile loans.
When Okile took a Sh3,596 loan, she used the money to buy pizza for her friends' children.
"I know that I am not alone in this. If you ask many women, they have taken these loans because they did not want to miss out on something, either for themselves or their children," she says, adding that unless she gets a windfall, she is not planning to repay the loan.
Studies show that six per cent of female borrowers compared to four per cent of men have taken digital loans out of curiosity, and 50 per cent of women under the age of 30 are more likely to have used or been using digital credit compared to women over 30 years of age.
The survey by Financial Sector Deepening Kenya (FSD) also shows borrowers to be predominantly urban and at least with a college education.
Most women use the funds to settle bills like electricity, shopping or even to treat their family or friends.
This is why studies show that 60 per cent of women use their savings to repay the loans, with five per cent of them foregoing paying medical expenses to live the 'Instagram life'.
Meet Paula Wairimu, a 35-year-old urban woman who works as an insurance executive.
In 2017, she needed some money. Her job was not paying her much and she needed money for her fare, food, and rent. "I had heard about digital lending apps, so I thought to myself, let me try."
The application went through and she received Sh2,500. She was enthralled.
Soon, she realised that if she paid on time or before the due date, the loan limit increased. "I also discovered other lending apps so I downloaded them and started borrowing," she says.
She enjoyed the convenience and the fact that she did not have to borrow money from her family and friends.
"With the apps, people do not need to know about your financial situation. So I was like, this is something good. To my pleasant surprise, the loan limits kept growing. My loan limit increased from Sh2,500 to Sh6,500, then to Sh30,000. I used the money for household purposes," she says.
Then she started borrowing from one app to pay another and she found herself trapped in that vicious cycle. She was borrowing Peter to pay Paul.
"On many occasions, I failed to pay on time. The lenders stole my peace. I would get endless calls and threatening texts at any time of the day. I realised that I was under stress, and that is when it dawned on me that I was on the wrong path.
"I hope this is not about money!" I would whisper to myself whenever I got a call from a new caller. "Worse, those calls come even while in public. It is quite embarrassing."
To calm down her debtors, she started reaching out to friends and family. "I still owe my friends. Also, remember, my income streams have not increased. So I am broke and in debt. The thing with mobile money is that it blinds you with the convenience and you apply for a loan hoping to pay before the due date, only for the day to come and you are in a worse state," she says.
This does not mean that she will stop borrowing. However, she has learnt her lesson – to borrow only what she can afford to pay back and live within her means.
The modern culture of ‘I want it now', and ‘If Mitchell has it, I also deserve it' has many young women hooked to bad debt. Before they know it, they are locked out of access to good credit.
Nyakio Namu, 29, a primary school teacher, cannot access loans from the various banking institutions after she was reported with a negative listing for failing to pay Sh28,000 she owes one of the digital moneylenders.
"It started as curiosity. When I first borrowed I got the Sh500 instantly. I was hooked. I also run a mobile money banking agency so it was easy to get money from the business and pay the loans," she says.
Looking back, she cannot account for the money because it was mostly spent on food and impulse purchases. Her husband does not know about it.
"After exceeding the 30-days limit, I started receiving calls from different callers daily. I had to change my sim card to keep them off," she says, adding that she still plans to pay the loans in the future.
However, for Naomi Mutheu, online lending is the best thing that could have happened to her beauty business.
"I wanted to start my business. I had completed a course in cosmetology in 2017 and I did not have the capital. I downloaded several apps and took loans amounting to Sh10,000.
I cleared the loans within the given period. Now, I only borrow when there is an emergency," the 27-year-old says.