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 5:02 PM

Yemen's Multilayered War: The Houthi Rebellion

This is the 3rd part of a short explainer article series on the current crisis in Yemen.

To read the 1st part of the series click on the link.

To read the 2nd part of the series click on the link.

After the overthrow of the monarchy in 1968,  Yemen existed as two countries — North Yemen and South Yemen.  These two countries united in 1990, after several years of conflict with one another.

This unity could not remain for long and the North-South divide resurfaced which led to the first civil war of unified Yemen. This civil war was short-lived and ended in 1994 after the decisive victory of the pro-unification governing faction over the Southern saperatist faction.

On the other hand a major dissatisfaction with the central government was simmering in the region dominated by a local branch of Shia Muslims known as Zaidi. They are the decendent of Prophet Muhamma and believe that Muslims should be ruled only by a descendant of Prophet Muhammad whom they call an Imam. They have ruled Yemen for more than 1,000 years which ended in 1962.

Zaidis are a minority sect in Yemen but have much ideological affinity with the Sunni Shafi'i majority. They lived together harmoniously and prayed in the same mosques for hundreds of years.

A new element was also getting added to the dangerous mix of sub-nationalism, intra religious division, and tribal loyalty in Yemen. The Yemeni veterans of Soviet-Afghan war who fought with the mujahideen were battle hardened and well versed in guerilla warfare. They started a low level insurgency and also tried to impose a hardline interpretation of Islamic religious and social practices in Yemen.

In order to counter the socio-economic and political marginalization by the central government as well as the growing influence of Salafism in their northern heartland, the Houthis formed a movement named Ansar Allah. President Saleh however accused them of attempting to overthrow the government and of seeking to revive the rule of the imamate in Yemen.

The Houthi Rebellion (also known as the Shia Insurgency):

The Houthi Movement in its current militant form began in 2004 by Hussein Badreddin al-Houthi, religious, political and military leader, as well as former member of the Yemeni parliament between 1993 and 1997. Though he was killed in the action of very early in his fight with the government forces, his brother who took over the movement leadership made it politically and militarily a formidable force in Yemen.

Zaidis have had historical grievances against the Wahhabi, the dominant Sunni sect in Saudi Arabia, who assisted North Yemen in the First Yemen Civil War. The Zaidi fear they still have too much say in Yemeni politics. They have also fought against the Salafis, whom they accuse of implementing the hardline interpretation of Islamic religious and social practices in Yemen. In order to counter these forces, Houthis destroyed the schools run by them in Saada, Dar al Hadith in Dammaj and its sister school in Kitaf, claiming them to be “feeder schools”, for al-Qaeda.

It was the 2011 Yemeni Uprising (or Intifada), which catapulted Hauthis to the centre of Yemen politics. They sided with the common citizens of the country in demanding the resignation of President Saleh whom they charged with corruption and for being a lackey of Saudi Arabia and the USA. A Nesweek photo-essay reported that Houthis are fighting "for things that all Yemenis crave: government accountability, the end to corruption, regular utilities, fair fuel prices, job opportunities for ordinary Yemenis and the end of Western influence."

Later in 2011, President Saleh resigned, as per the Houthi terms, letting Abd Rabbuh Mansur al-Hadi step in as the President in exchange for immunity from prosecution. However the Houthis pressed on with their power grab which started resentment among other players.

In an ironic act, ex-President Saleh who was overthrown in an Houthi led public uprising, threw his weight behind Houthis in the power struggle. In 2015 he publicly announced his formal alliance with the Houthis, and hoped for ceasefires with the Arab Coalition.

In 2015, Hadi, the President of Yemen was placed under house arrest by the Houthis and forced to resign. He managed to flee to Aden, and rescinded his resignation. He fled to Saudi Arabia, and returned in September with the Arab Coalition at his support. Ever since, he has used Aden as his governing base.

At the same time, Saudi Arabia imposed severe restrictions on import, including air and sea blockades in Yemen, resulting in the shortages of food and medicine. Given the fact that Yemen is dependent on imports for food supply and medicine, it is no surprise that the blockades have led to a famine situation, compounded by an outbreak of cholera since 2016 caused by and worsened due to the air-strike bombed healthcare infrastructure.

After aligning with Houthis for many years, Saleh once again took an about turn in 2017 by publicly ending this alliance and stated his openness to talk with the Saudi-led coalition. Al Jazeera reported this was because the Saudi Prince had decided that Saleh, rather than Hadi, would help to win the war. However, the same year, Saleh was assassinated.

In September 2019, the Houthis claimed responsibility for drone attacks on Saudi Arabia's eastern oil fields of Abqaiq and Khurais, disrupting nearly half the kingdom's oil production.

In January 2020, the Houthi Special Criminal Court found Hadi guilty and sentenced him to death, for “high treason...and looting the country’s treasury”, over other things,

It is important to note that Saudi Arabia and the USA have also seen this war as a Sunni Saudi pitted against a Shi’ite Iran. This has been shown to be inaccurate - both nations likely intending it as an excuse for using extreme military might and sanctions that Saudi has engaged in with the backing of both, the Obama and Trump administration, to use Yemen for strategic purposes.

It is this war, between Saudi-backed Hadi at Aden and the Iran-led Houthis at Sana’a, that has prolonged for 5 years and displaced millions, prompting the UN to call it the worst man-made humanitarian disaster.


To read the 4th part of the series click on the link.

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