“In November last year, a lady came to the Central Bank to explain to us that her husband had committed suicide after getting involved with one of these lenders,” she said. CBK Deputy Governor Sheila M’Mbijjewe revealed the incident, which was reported to the regulator by the distressed family of the victim. The aggressive nature with which online lending firms deploy to collect what they advanced has become so alarming that no less than the CBK wants new laws to stop cyber shaming by these cloud-based facilities...

Regulators and consumer lobbies earlier raised the red flag about customer data protection by the credit-only lenders, the high interest rates or transaction fees that they charge borrowers, multiple borrowing from different lenders, non-disclosure of pricing terms and their lack of dispute resolution mechanisms. The unregulated credit-only institutions are fast-growing  partly due to people’s desperation for cash, healthcare or school fees. Borrowers in most cases enter into the arrangements under duress.With their exorbitant interest rates and conditions, microcredit from the online lenders has plunged many borrowers into a debt trap....[Many] have been forced to contract multiple loans to pay back for the former ones, and to make huge sacrifices to reimburse them over weeks and months. Many... said the loans had plunged their lives into a vicious cycle of austerity, unemployment and poverty.