M-Shwari has clarified that loan recovery, credit reporting and default tracking are linked to a borrower’s national ID, not their mobile phone number, countering widespread misconceptions among digital credit users.
M-Shwari has clarified that its loan recovery and credit reporting processes are tied to a customer’s national identification details rather than their mobile phone number, reinforcing that changing or abandoning a SIM card does not eliminate outstanding digital loans.
The clarification comes amid persistent confusion among borrowers over how mobile loans are tracked and recovered, particularly as digital credit products remain widely used across Kenya’s informal and small business economy.
According to the lender’s loan recovery framework, M-Shwari loans are managed at the level of the borrower’s national ID used during registration. While mobile phone numbers are used as access channels, they are not the primary identifier for loan ownership, repayment obligations or recovery actions.
Loans tied to national ID, not SIM cards
Under M-Shwari’s terms and conditions, each loan account is linked to the national ID used at the point of registration. This means that the legal obligation to repay a loan remains attached to the borrower’s identity, regardless of changes in phone numbers.
This structure allows the lender to maintain continuity of loan records even when customers switch mobile lines, lose SIM cards, or register additional numbers.
As a result, attempts to avoid repayment by discarding a phone number or registering a new line do not sever the link between the borrower and their outstanding loan.
Multiple phone numbers linked to one ID
While loans are managed at ID level, M-Shwari also registers phone numbers against the same identification details. If a borrower who has defaulted later registers a new mobile line using the same ID, the lender can still identify and engage them through that new line.
This approach enables loan recovery efforts to continue across multiple accounts or access points associated with the same individual, strengthening enforcement of repayment obligations in the digital lending space.
The system reflects broader trends in Kenya’s financial sector, where customer due diligence and identity-based tracking have become central to risk management and regulatory compliance.
Recycled phone numbers not liable for past loans
M-Shwari has also clarified that customers who receive recycled phone numbers are not responsible for loans taken by previous users of those numbers.
In such cases, any outstanding debt remains linked to the original borrower’s national ID, not to the phone number itself. New users who acquire recycled lines are therefore not exposed to liability for loans they did not take.
This clarification addresses concerns among mobile users who have reported receiving repayment messages or reminders for loans they did not borrow, a common issue in markets where mobile numbers are frequently recycled.
CRB listings follow the borrower’s ID
The clarification extends to credit reference bureau (CRB) reporting, which is also conducted on an ID basis rather than by phone number.
Any missed payments or loan defaults are recorded against the borrower’s national ID, meaning that negative credit listings persist even if a customer changes their mobile number.
This has significant implications for borrowers who rely on digital credit, as CRB listings affect access to future loans not only from M-Shwari but also from banks, microfinance institutions and other digital lenders.
The ID-based reporting framework is consistent with Kenya’s credit information sharing regulations, which require lenders to submit borrower data using unique personal identifiers.
Right of lien across accounts
M-Shwari’s loan recovery framework also includes the bank’s right of lien, which allows the lender to recover outstanding loan amounts from any account held under the same ID.
This means that if a borrower holds multiple accounts linked to the same identification details, the bank may apply funds from those accounts toward settling overdue loans, subject to applicable laws and contractual terms.
The right of lien is a standard feature in banking agreements and reinforces the importance of borrowers understanding the full scope of recovery mechanisms available to lenders.
Verifying registered mobile lines
Customers are advised to confirm which mobile lines are linked to their national ID to ensure accurate account management and avoid confusion.
M-Shwari users can check their registered lines by dialing *106#, a step that can help borrowers track their exposure and ensure they are aware of all access points associated with their financial accounts.
This verification process is particularly relevant for individuals who have registered multiple SIM cards over time or who share devices within households or businesses.
Implications for borrowers and digital lending
The clarification highlights the increasing sophistication of Kenya’s digital lending infrastructure, where identity-based systems are used to manage risk, enforce repayment and support credit information sharing.
For borrowers, the message is clear: digital loans carry the same repayment obligations as traditional bank credit, and changing phone numbers does not erase debt.
For the financial sector, ID-based recovery systems help reduce defaults and improve the sustainability of digital credit products, which have faced scrutiny over high default rates and consumer protection concerns.
As regulators continue to tighten oversight of digital lenders, clarity around loan recovery processes is likely to remain a key issue, particularly as millions of Kenyans rely on mobile credit for household expenses, working capital and emergency needs.
