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 5:04 PM

Kosovo and Serbia- A never ending saga of conflict

Kosovo is a small landlocked country in the Western Balkans with a majority of ethnic Albanians and Muslims. The country formerly was a part of Serbia but declared independence in 2008. While Kosovo’s independence has been recognized by nearly a hundred nations including the US, countries like Russia and China along with a few European Union nations have sided with Serbia against Kosovo.

Kosovo and Serbia have been at crossroads for a long time. Kosovo used to be a Serbian province under the communist-run Yugoslavia. However, the dissolution of Yugoslavia and the move by Serbian leader Slobodan Milošević to bring Kosovo directly under Belgrade’s administration fuelled war between the two regions.

The situation worsened with the violence in the Bosnian War ensuing from 1992-95 which was termed as “ethnic cleansing” of Muslims. By 1996, the Kosovo Liberation Army (KLA), a paramilitary group had been formed in response to the campaign of Milošević. The situation remained tense with Serbian Police killing nearly 50 people of a KLA member’s family in 1998.

Violence continued to escalate from both sides as international calls for putting an end to the violence grew. "We are not going to stand by and watch the Serbian authorities do in Kosovo what they can no longer get away with doing in Bosnia," US Secretary of State Madeleine Albright reportedly said. The UN banned the sale of arms and ammunition to Serbia as NATO began to plan an intervention in 1998.

However, the situation escalated to a worse in the "Račak Massacre" of 1999, wherein Serbian special police killed 45 ethnic Albanians. The NATO then initiated a 77-day air campaign which ended with the withdrawal of the Serbian army and the paramilitary force of Kosovo. Kosovo became a self-governed territory post the NATO campaign under the United Nations.

Despite several efforts from the European Union and the UN, the two countries have failed to arrive at a common ground till date. Kosovo declared independence in 2008 but Serbia does not acknowledge it despite having no formal control in the region.

In 2016, the countries yet again saw each other at crossroads when Kosovo sought to attain 80% shares of the Trepca mining and metallurgical complex in the northern region which is dominated by Serbs. The dispute became so pressing that it became one of the agendas for the UN Security Council.

In early 2017, Belgrade, the capital of Serbia, issued an international arrest warrant for former Kosover guerrillas including Ramush Haradinaj who served as a commander in the 1998-99 war against Serbian rule. He also briefly served as Prime Minister of Kosovo in 2004 and 2005.

As Kosovo asked the EU to press Serbia for dropping the charges, government and opposition leaders called for an end to the EU-mediated talks between Serbia and Kosovo. Serbia’s move to give the nod for Haradinaj’s extradition from France where he was being detained was met by Kosovo’s move to cancel Serbian President’s visit to a mainly ethnic Serb town in Kosovo on the eve of Christmas Day.

The gunning down of Oliver Ivanović, an ethnic-Serb politician in northern Kosovo in 2018 was yet another setback for the worsening ties between the two countries. Then Serbian President Aleksandar Vucic termed it an “act of terrorism”.

Late in 2018, Serbia blocked Kosovo’s bid to join Interpol, a move that saw Kosovo raise customs duties on Serbian imports by 100%.

In May 2019, Kosovo carried out a large anti-corruption and anti-smuggling drill wherein it detained nearly 23 people including two UN personnel and fired tear gas as well as live ammunition as per a few reports. The entire drill was concentrated in a Serb-dominated region in the North.

Serbian president Aleksandar Vucic reacted by saying that he wants to "preserve peace and stability", but that Serbia "will be fully ready to protect its people at the shortest notice". The European Union, the United Nations Interim Administration Mission in Kosovo (UNMIK) and KFOR (the NATO-led international military presence) all called for the two countries to maintain peace. However, the situation remains critical.

With Serbia being under pressure from international peacekeepers, it’s highly unlikely that it will intervene through its military forces. However, its influence in the Northern region of Kosovo means that both the countries will have to work towards maintaining amicable ties with each other as Kosovo hopes to become a UN member and a fully functional state.

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