There is probably one key reason that anyone would be looking for a loan on L-Pesa. That is to ensure that they can have access to microloans for many reasons such as building up businesses or even elevate their lives overall. For the most part, the people who choose to benefit from microloan services do so with the intention of paying back the full amount. At L-Pesa, there is motivation for doing this, as you get to maintain a great credit score which will then give you access to a larger amount that you can borrow almost instantly. However, there could be an instance where there is a default on the loan payment. In this case, what happens? Here is what you need to know.
Borrower cannot pay back the loan
Things may have not worked out as expected for the borrower, and the borrower is then challenged when it comes to paying back the loan as expected. The first thing that the borrower should do is contact L-Pesa to discuss how the loan repayments can be rescheduled. This way, the credit score remains unaffected and a compromise on the repayment is done to suit both L-Pesa and the borrower.
Borrower get severely injured
The borrower might experience a serious injury that inhibits their ability to earn an income and thus pay off the loan. If this happens, then L-Pesa needs to be notified so that the repayment of the loan can be put on hold for a certain period. Once this time elapses and the injured party has received treatment and become better, then the loan repayment can continue as per the initial agreement. If the repayments are still not made, then L-Pesa will not be able to offer a loan to that borrower again. The credit score will then drop to zero and they will be blacklisted from L-Pesa.
Borrower dies before paying back the loan
In the worst-case scenario of default, the borrower of the loan may pass away before the repayment of the loan is complete. As L-Pesa services are designed to facilitate finance to all, there is often no collateral that can be used to recover the amount that has been borrowed. In this case, L-Peas should be notified in writing by the next of kin that the borrower has passed away. The amount that is remaining and which is outstanding is typically considered to be a loss for L-Pesa.
L-Pesa has worked hard to develop strong relationships with all borrowers. These relationships are based on communication and understanding, to ensure that the service offered meets the needs of the borrowers. The historical repayment rate that we have for loans is at 96%, which reveals that it is rare for people to default. In the event of death, L-Pesa will take responsibility for the loan and it shall count as a loss for the company. Otherwise, steps are taken to ensure that the borrower can pay the loan with ease.