The onset of technology has brought about so much ease in accessing funds without having to use the conventional banking and SACCOS for one to have access to money and in particular loans. The availability of smartphones and ease of internet accessibility and customer friendly data packages have made it more affordable to access the internet and also the development of online applications which have made it easier to offer mobile loan applications which are available at Google play store for the android phones.
A number of advantages have been felt and ease of doing business due to the fast manner in which traders can access loans and also the ease in paying for the loans. In more detail the development of technology and the incorporation of artificial intelligence which assesses the risks of a borrower and approves the loans instantly in accordance with ones limits and also the reasons for the loan.
On the other hand the reliance on the conventional use of banks and SACCOs for traders and account holders was more tedious and time consuming unlike online lending applications which are quick and easily accessible as one uses their phone. This has promoted businesses and their functionality and their ability to operate by saving time and also the relatively low interest that is charged on the loans.
However, due to the high risk that is associated with the loans and the lack of collateral for those borrowing the monies, the payment duration is quite small for one to make any gainful earnings and therefore, it calls for one to have a ready and profitable investment which will get to return the money in good time. On the other hand due to the high competition for the market the online loan companies have come up with methods on how clients will increase their credit worthiness by paying the loans weekly in order to reduce the risk of defaulting.
Unfortunatley,due to the unpredictability of businesses and also the competing interest for money demands then many applicants have failed to make their payments in good time and they have ended up being blacklisted by the companies and some have been put in the credit reference bureau which blacklists an individual and exposes their financial worthiness to all other financial institutions to avoid or be cautious when lending money to that individual.
Due to the availability of the monies and the many online lending firms many people especially the youth have taken to borrowing money without having a conclusive payment option and limiting their credit worthiness in future for either government funds and also huge loans for development. Impluse spending and psychological problems have been on the rise due to the availability of cash and limited paying options. The risk of being listed on the credit reference bureau and tarnishing of the credit worthiness has seen a steady rise of mental illnesses due to the depression and also the pressure of life to maintain the society expectations and living standards on the hand despite the high cost of living which is not in tandem with the earnings and business growth.