Sunday, July 12, 2020

Kenyans turning to mobile loans in times of COVID-19

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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.

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February 4, 2021 5:06 PM

Environmental Impact Assessment (EIA) 2020: Why the draft is being opposed in India?

The Ministry of Environment, Forest and Climate Change (MoEFCC) sent a shockwave through the country when it released the Environmental Impact Assessment 2020 draft notification on March 12, 2020, amending the 2006 version.

The EIA serves as a means for the industries to obtain environmental clearances for their projects. The proposed projects are brought in front of the concerned public to be discussed and debated. If the projects proposed by the industries disturb the ecology and people living in that particular area to a large extent, then the Government cannot give permission for the project to continue.

There are several things included, or excluded, in the 2020 version which have enraged environmentalists, nature lovers and numerous concerned citizens across India.

Firstly, it includes post-facto approval. This means that any factory which has already begun with construction, will get a clearance, irrespective of the environmental damage it has already caused. However, the owners of the concerned factory will have to pay a fine of a certain amount.

Secondly, the new draft notification is released only in Hindi and English. Considering the lingual diversity of India, the communities which are not fluent in either languages will not know what the notification is about. This will reduce transparency and the livelihoods of such communities might get demolished without any warning.

The 2006 notification made it mandatory for every company involved in a project to submit a report every six months, verifying that the company is working within the terms of the granted permission and not going overboard with the available resources. The 2020 draft has extended the timeline of report submission once in twelve months. Moreover, certain projects like expansion of highways and road construction through forests are exempted from getting clearances.

Himalayan foothills, Sikkim, India | Source: Flowcomm via Flickr

Such features of the 2020 draft violate norms of the Environmental Protection Act (EPA, 1986) and also indicate that the scales are tipping dangerously towards the big industries, at the cost of our planet’s health. Livid cries have erupted from the people, especially those living in North-Eastern India and foothills of the Himalayas.

Himalayan ecology is at the brink of fragility and it requires stringent monitoring laws, the opposite of what EIA 2020 offers. "The Himalayan region today is in the most vulnerable position with massive climate-induced disasters, increasing deforestation, loss of biodiversity etc. Amending environmental norms will accelerate the ecological crisis in the Himalayas" says Ravi Chopra, a renowned environmentalist from Dehradun.

Since the draft has not come out in regional languages, the Karnataka High Court restrained the government from publishing the final document till it was accessible to a wider audience.

Although the government extended the deadline from June 30 to August 11, 2020, for the general public to pool in their opinions through emails, it shut down three main online websites on which youngsters of this country protested against EIA 2020. “We reasonably have a clear basis, based on our correspondence as well as our technical analysis, that this was a domain seizure by the government of this website” says Apar Gupta, executive director of Internet Freedom Foundation (IFF).

The EIA 2020 amendment does not do justice to the fundamental principles of environmental impact assessment and is more focussed in easing the clearance for the industries than the protection of the environment.

Economic growth, no doubt is important, more so at this trying time. However we should also bear in mind the cost which is to be paid for it, sooner or later.

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