How men are trapped in vicious digital debt cycle

More than two-thirds of mobile loans are taken by men, a new report reveals. Borrowers who are mostly indebted are men under the age of 25 as well as those between 31 and 40 years.

The under 25 years male is probably still in college or very young in their careers and struggling to make ends meet.

The 31-40-year-old man, on the other hand, is yet to come across meaningful money that can afford them comfortable living while on the social front, they have to shoulder the burden of young families as they contend with the pressure of impressing their peers.

Men in both age groups have to resort to the digital lenders to finance their basics and at times flashy lifestyles as they wait for the next paycheque or the next round of pocket money for the under 25-year-olds still in college. This has in turn seen them end up in a vicious debt cycle.

A report by CreditInfo, a credit reference bureau, shows that 65 per cent of mobile loan borrowers are men, with women only taking 35 per cent of the loans offered by different lenders that include mobile apps and platforms by banks.

“Men were the main mobile loan borrowers and on average received higher loan amount,” said Kamau Kunyiha, chief executive at CreditInfo, credit reference bureau, when it published a report on mobile lending.

“While the market is heavily dominated by men, we can see today improvement in mobile lending. Central Bank has been reporting that digital financial services – which do not require traditional forms of security – are helping to narrow the gender gap in financial inclusion.”

The report also showed that men take bigger loan amounts, at an average of Sh6,086, compared to the average loan size that women take at Sh5,472.

Borrowers, both men and women, between 31 and 50 years make up half of the people that take up mobile loans, while borrowers younger than 30 years make 40 per cent of the borrowers.

“Young people will often be scored lower since their analytics will show fewer revenue streams and lower money velocity compared with their counterparts in the older demographics, who will likely be earning from a salary or a business income. Customers can, however, improve their credit scores by making payments on their loan obligations on time,” said Kunyiha.

The report shows that people under 25 are lent an average of Sh3,600 while the amount doubles for borrowers who are in the 41-50 age group.