The Fintech Debt Trap
Online lenders are preying on desperate borrowers and could trigger a new consumer financial crisis
The economic cataclysm brought on by the coronavirus caught American consumers in an extremely precarious position — one that was evident well before more than 50 million people filed for unemployment. By the end of last year, Americans had racked up nearly $4.2 trillion in consumer debt, not including mortgage debt — a record high. The greatest contributor to this surge was not credit card spending or student debt or auto loans, but something newer and, for many borrowers, even riskier: high-interest personal loans, increasingly offered by online financial technology companies known as “fintechs.”
https://theintercept.com/2020/08/30/fintech-debt-personal-loans-economic-crisis/
#fintech #personal #loans
Online lenders are preying on desperate borrowers and could trigger a new consumer financial crisis
The economic cataclysm brought on by the coronavirus caught American consumers in an extremely precarious position — one that was evident well before more than 50 million people filed for unemployment. By the end of last year, Americans had racked up nearly $4.2 trillion in consumer debt, not including mortgage debt — a record high. The greatest contributor to this surge was not credit card spending or student debt or auto loans, but something newer and, for many borrowers, even riskier: high-interest personal loans, increasingly offered by online financial technology companies known as “fintechs.”
https://theintercept.com/2020/08/30/fintech-debt-personal-loans-economic-crisis/
#fintech #personal #loans
This lending app publicly shames you when you’re late on loan payment
Okash, a popular fintech app in Kenya and Nigeria, threatens users to notify everyone on their contact list when you fall behind on your loan payments.
The only person David Kiragu lied to about the texts was his mom. To those close to him, like his partner, friends, former schoolmates, and work colleagues, he explained what was going on. To more distant contacts, including annoying relatives, he said nothing.
His mother probably knew he was lying — mothers often do — but she let it slide.
“I couldn’t tell her the truth,” Kiragu said to me last December. “So I told her it was one of those prison scams and she should ignore it.”
He owed money. Not a lot of it, but that didn’t matter. His fintech creditor was still telling everyone in Kiragu’s inner circle that he was a deadbeat.
It happened like this: Toward the end of March 2018, Kiragu found himself in a bind. At 32, he earned a solid income as a manager at an iNGO in Nairobi. But for the first time in his life, he couldn’t make rent.
https://restofworld.org/2020/okash-microlending-public-shaming/
#Africa #fintech #personal #loans
Okash, a popular fintech app in Kenya and Nigeria, threatens users to notify everyone on their contact list when you fall behind on your loan payments.
The only person David Kiragu lied to about the texts was his mom. To those close to him, like his partner, friends, former schoolmates, and work colleagues, he explained what was going on. To more distant contacts, including annoying relatives, he said nothing.
His mother probably knew he was lying — mothers often do — but she let it slide.
“I couldn’t tell her the truth,” Kiragu said to me last December. “So I told her it was one of those prison scams and she should ignore it.”
He owed money. Not a lot of it, but that didn’t matter. His fintech creditor was still telling everyone in Kiragu’s inner circle that he was a deadbeat.
It happened like this: Toward the end of March 2018, Kiragu found himself in a bind. At 32, he earned a solid income as a manager at an iNGO in Nairobi. But for the first time in his life, he couldn’t make rent.
https://restofworld.org/2020/okash-microlending-public-shaming/
#Africa #fintech #personal #loans
Rest of World
This lending app publicly shames you when you’re late on loan payment
Okash, a popular fintech app in Kenya and Nigeria, threatens users to notify everyone on their contact list when you fall behind on your loan payments.