"Desperate Times Call for Desperate Measures": User Concerns with Mobile Loan Apps in Kenya

The usage of mobile loan applications has proliferated in developing countries. This is due to the ease and speed in which they disburse small loans to users, compared to traditional financial institutions, such as banks, that only offer similar loans based on existing customer relationship or collateral. As mobile loan apps are a relatively new industry, these apps are mostly unregulated and therefore tend to charge extremely high interest rates. Further, they collect and sometimes misuse sensitive user data through the course of verifying customers and ensuring loan repayment, such as users’ contacts and SMS communications through the mobile device permission system. Yet, the reasons for usage as well as privacy concerns with these mobile loan apps in the developing world, and specifically in Kenya, remain largely unexplored. To investigate mobile loan apps, we conducted semi-structured interviews (n = 20) with loan app users in Kenya, and we find that most users generally have privacy concerns, particularly regarding access to their phones’ contacts. However, they often overlook these concerns as this outweighs their need to procure loans. At the same time, we find that users struggle to understand the use of permissions by these mobile loan apps (and mobile apps generally), confirming prior research on comprehension of Android permissions. Our results highlight privacy risks, concerns and behavior with the emerging mobile loan app marketplace in the developing world, and we offer recommendations that can help protect their users’ security and privacy, including the need for transparent communication by these apps on how they collect, use and secure their users’ data.