Recent reports have placed between six million and nine million Kenyans as consumers of the wide array of digital lending services that seem to have found product market fit. The ebb and flow of demand side consumption, is such that no one takes out a facility with a primary agenda of defaulting or absconding.
Research points to poor business performance, loss of income, poor planning and prioritisation of expenditure as main reasons for falling into delinquent status. What follows is the listing of that status with immediate repercussions on the ability to access additional credit to stabilise and play the hand dealt. To many what still looks like a dark art, is how to fix and improve on one’s credit score.
First, you need to find out where you stand in the system. Identity fraud is rampant and our small pool of shared English and ethnic names does not help.
Also, banks are notorious for escalation of activity based anomalies such as your account going into over draft when they take out monthly fees for example.
Truth is millions of account operate in zero or near zero status and most are opened for specific purposes with funds in constant transit. It will take some effort and a little money but engage the major licensed credit bureaus and see what they have on you. Where discrepancies exist, follow up and ensure correctness of your data.
Second is that you need to be visible on the system. I used to think that having no financial debt registered should be the aim of every adult human, until I needed a facility and was told that there was nothing to work with.
Agreed, digital lenders came to the market with differentiated models to score users, but their caps limit how far you could leverage. The thought here is to build the ‘relationship’ before you need it. Think of how some African mothers interact with local kiosk owners; even when they can pay cash they will ask for credit and since it often comes at no interest, pay it back soon. Spread across multiple kiosks when hard times come, they have access to multiple lines of credit with no questions asked.
Third is discipline. Some lenders have gone rogue and misuse borrower data where they send unsolicited messages to one’s contacts. All however default to collection agencies whose tactics leave a lot to be desired. If you have or know someone who has been on the receiving end, the one wish is to get it done and dusted. Frugality, resourcefulness and determination are the only way out.
Credit scores are but a snapshot and you have the power to decide what it reads next time it is pulled up.