That mobile loan apps in Kenya are on a roll has not been in question. Given the tough economic situations many Kenyans find themselves in, and the high mobile penetration in the country, it has never been easier to apply for and get approved to receive a short-term loan within minutes.
In fact, the latest data from analytics platform SimilarWeb shows that out of the top 10 free apps on the Google Play Store, 4 are apps from the finance category and all of them offer loans: Tala, Branch, OKash and OPesa.
As for Tala, which ranks first on the Google Play Store among apps listed in the finance category in the country, and second among all apps (after WhatsApp), it just announced yesterday the closure of a USD 110 million round of funding “to accelerate financial inclusion around the world”. The app, previously known as Mkopo Rahisi (“easy loans”), has been available in the country for the last 5 years and while it has operations in several other countries around the world, including in neighbouring Tanzania, its Nairobi office is the largest, so as to handle its 2.5 million local user base.
What the top 4 loan apps in Kenya have in common with tens of others that have been widely embraced by Kenyans is not only their ease of access and short loan approval period, thanks to analytics and automation, but also their short repayment period.
This is where the problem lies. A recent update by Google to its developer policies now indicates that such apps may not be welcome on the Google Play Store.
“We do not allow apps that promote personal loans which require repayment in full in 60 days or less from the date the loan is issued (we refer to these as “short-term personal loans”). This policy applies to apps which offer loans directly, lead generators, and those who connect consumers with third-party lenders,” reads an update to the policy.
On this technicality, OKash and OPesa appear to be off the hook with each of their app pages on the Play Store indicating their shortest loan period as 91 days. Both Branch and Tala still state that they offer loans for periods shorter than the 2-month period that Google requires: at least 4 weeks for the former and at least 3 for the latter, at least going by the description on their Play Store app pages.
Another application, Timiza, from the Barclays Bank of Kenya, unlike the 4 which seem to comply with the other Google Play policy requiring developers of loan applications to list the minimum and maximum repayment periods as well as the maximum Annual Percentage Rate (APR), does not list any of the required details on its page.
While the aforementioned apps are out and out lending apps, it is not clear how the same policy is being approached with regards to other applications that also include short-term personal credit facility provisions among the other features they are known for and how that will affect them in the long run.