From Rest of World, May 2020:
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.
His choices were limited. He could always borrow the remainder from friends, family, or somebody else in his network. The problem was that if he did, people would know he was living beyond his means.
But then one morning Kiragu logged into his Facebook account and saw an ad for a fintech app called OKash that promised to be the discreet friend who would spot him some cash and never mention it again. Offering the ability to “process loans in seconds,” OKash is one of many fintech apps that have sprung up in Kenya since 2012. All he needed to do was download the app, enter his financial details, and let the algorithm generate a credit rating. He would get the money he needed and could pay it back once he was liquid.
He doesn’t remember that day too well now, but Kiragu thinks it took just minutes to apply for his loan. His money arrived right away, so he paid his bills and moved on. “I started with about $15, which I repaid [on time], and my loan limit expanded. Then I borrowed about $35, which I also repaid,” he told me as we sat on the balcony of a chic restaurant in a mall outside Nairobi.
It was the third loan that upended his life. He needed it to top up his rent, because by then a vicious cycle had begun, wherein he would pay off his loan then borrow again to fill the hole that the last payment had left in his finances.....MUCH MORE
Kiragu started getting calls even before that deadline passed.
“Will you repay your OKash loan?” Kiragu remembers a caller asking him, before warning that if he missed a payment, the company would notify everyone on his contact list. In texts he showed me on his phone, an OKash representative had written an hour before the deadline lapsed, “Despite several polite reminders on your OKash loan . . . No PAYMENT received yet . . . Note that we are going to invade your privacy according to Terms of Service clause 8, IF NOT CLEARED BY 4PM.” The clause in question reads as follows: “In the event we cannot get in contact with you or your emergency contact, you also expressly authorise us to contact any and all persons in your contact list.”...
