Sunday, July 12, 2020

Kenyans turning to mobile loans in times of COVID-19

This article is by

Share this article

Article Contributor(s)

Kanika Bajaj

Article Title

Kenyans turning to mobile loans in times of COVID-19

Publisher

Global Views 360

Publication Date

July 12, 2020

URL

People of Kenya

People of Kenya | Source: Flightlog via Wikimedia

The economic impact of COVID-19 is felt on the personal finance of people across the world who are looking for ways to tide over the situation. In Kenya, people are lapping the short-term credit in the form of digital loans by mobile money operators. The number of people taking digital loans has doubled during the COVId-19 induced lockdown period.

Boston Consulting Group's Consumer Sentiments Survey conducted in April and May 2020 reported that "In May, 29 percent responded that they had taken out a short-term loan, compared to 16 percent in April. Mobile money operators were the most common sources of this credit”

Kenya is a pioneer in using mobile money transfer services as the key tool for providing financial inclusion to its citizens. A simple money transfer service, M-PESA launched in 2007 has transformed the financial service industry in Kenya. Today mobile money operators are providing multiple services like digital loans, marketplace for small businesses and farmers.

Digital loans are easy to process and disbursed but there are concerns of shaming the defaulters and compromising the data security of clients. The Digital Lenders Association of Kenya (DLAK) which is a body representing the digital lenders of Kenya has distanced from two of their members, Okash and Opesa over unethical practices. These mobile apps have shared the details of defaulting customers with the moneylenders and asking them to recover the money.

DLAK also stated that Opesa and Okash are known for attacking a client's data privacy which is against the Kenyan data protection laws and has additionally spoiled the reputation of digital leaders in Kenya.

In April 2020, Central Bank of Kenya barred unregulated digital mobile lenders from forwarding the names of loan defaulters to credit reference bureaus. A huge number of Kenyans have been recorded on Credit Reference Bureaus by digital money lenders for loans as little as $5.

Central Bank of Kenya governor Patrick Njoroge told during a press conference in May 2020 that the central bank in consultation with the mobile money operators and digital lenders is presently working to develop a model where the borrowers are protected from mistreatment of online moneylenders.

The borrowers are looking up to the regulatory authorities and the industry bodies to come up with a mechanism which will protect their interest in times of such a health and economic emergency.

Support us to bring the world closer

To keep our content accessible we don't charge anything from our readers and rely on donations to continue working. Your support is critical in keeping Global Views 360 independent and helps us to present a well-rounded world view on different international issues for you. Every contribution, however big or small, is valuable for us to keep on delivering in future as well.

Support Us

Share this article

Read More

February 4, 2021 5:14 PM

Asian countries & the race for COVID-19 Vaccine

Our relationship with the new strain of coronavirus is almost 8 months strong now. Countries like the US, Russia, UK, China, India, and many more have already set their brainy scientists in the task of developing a vaccine, turning it into a race which desperately needs a winner, since no one wants this deadly relationship to endure. Several attempts have proved to be successful, especially in countries like Russia, USA, India, and China.

China was the first to start scouring for a vaccine the day WHO declared that the new strain of SARS-CoV, originating in Wuhan-China, has resulted in a pandemic. It is a fierce competitor, especially to the US, as almost 8 of the 24 promising vaccines approved for clinical trials are from China. It used the technology of ‘inactivated vaccine’ which basically means killing the actual virus and using that to create a vaccine. This method is quite useful in treating measles and influenza, thus, increasing the chances of success in the case of COVID-19 as well.

“It’s a tried and true strategy”, Paul Offit, director of the Vaccine Education Center at Children’s Hospital of Philadelphia, said  about the inactivated vaccine. One potential vaccine from China-based Sinopharm is already in the phase 3 of trials whereas Sinovac will enter the third phase this month. Moreover, China has permitted Sinovac and Sinopharm to dilute phase 1 and 2 of vaccine trials on humans to hasten the process.

The head of the Chinese Center for Disease Control and Prevention, Gao Fu, had also been injected with a potential vaccine on July 28, 2020. “I’m going to reveal something undercover: I am injected with one of the vaccines'' Gao Fu said in a webinar hosted by Alibaba Health, an arm of the Chinese e-commerce giant, and Cell Press, an American publisher of scientific journals. However, he did not reveal any more details about how and when exactly he administered himself with the vaccine and ‘hopes’ that the vaccine works.

Vladimir Putin, President of Russia | Source: Wikimedia

Elsewhere in Russia, on August 11, 2020, President Vladimir Putin proudly announced that Russia was the first country to grant regulatory approval to their vaccine after carrying out human trials for less than 2 months by the Gamalei Institute in Moscow. Regulatory approval permits vaccination of the masses. Although it has not undergone phase 3 of trials, Russia expects to initiate mass production of the vaccine by the end of this year. Kirill Dmitriev, head of Russia's sovereign wealth fund states that the vaccine will be called ‘Sputnik V’, named after Sputnik 1, the first satellite launched by Soveit Union which was a euphoric moment for Russia. More recently, China and Russia have joined hands in proceeding with the clinical trials of their vaccines.

These two instances seem to bring a new hope for the future, yet raise alarms and invite scepticism from the experts in the field of public health. One major concern is that without prolonged trials, vaccines should not be authorized for public use. Anthony Fauci, an infectious disease expert based in the US said “I do hope the Chinese and the Russians are actually testing the vaccines before they are administering the vaccine to anyone. Because claims of having a vaccine ready to distribute before you do testing is problematic at the very least”. Hence, some people are still in doubt regarding the safety of the product. Putin, however, rubbished such concerns and said "I know that it works quite effectively, forms strong immunity, and I repeat, it has passed all the needed checks".

An Indian biotechnological company, Bharat Biotech developed ‘Covaxin’ in collaboration with Indian Council for Medical Research (ICMR), using the mechanism of inactivated vaccine. It was successful in getting approval for human trials which were scheduled to begin in July, 2020. Initial reports stated that it would be ready for mass use by August 15, 2020, which also marked the 73rd Independence Day of India. However, Bharat biotech was clear in letting the public know that phase 1 of the trials are still on-going. ICMR cleared the confusion by stating that it would prepare the results of the phase 1 trials by August 15, 2020, not the actual vaccine for use. Phase 2 of the trials are awaited in September, 2020.

So far, the results of phase 1 trials have been positive as no serious side-effects are observed in the vaccine candidates. “The vaccine has been safe. No adverse effect has been reported. Even the point of injection pain, which is normal in vaccines, has been very mild” said Dr Kushwaha of Prakhar Hospital.

Meanwhile, the South Korean government stated on August 21, 2020, that it will secure adequate vaccine supply to its citizens by cooperating with international bodies and promoting local drug development. Three South Korean companies have started the process of making a vaccine and all are in the clinical trial phase. Bill Gates asserts that the South Korean pharmaceutical company, SK Bioscience, will have around 200 million vaccine doses ready by June 2021.

Japan is jointly collaborating with the UK, France and other European countries to establish a $20 billion fund to buy coronavirus vaccines, with Japan pledging a contribution of $800 million. It’s vaccine program aims to focus on giving primary attention to its medical workers and the elderly people of the country when the first doses of the vaccine are made. The state-funded vaccination program is believed to be officially adopted by Japan in September this year with negotiations with the UK and US based drug makers already in place.

With the race to bring COVID-19 vaccine seemingly coming to a close and it will hopefully be ready by the end of 2020 or early 2021. Till then, the entire world is watching this race with bated breath.

Read More