Sunday, July 12, 2020

Kenyans turning to mobile loans in times of COVID-19

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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.

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February 4, 2021 4:40 PM

Black Lives Matter: Will it lead to reform of Police Forces in the USA?

The spontaneous eruption of the “Black Lives Matter” protest after the unfortunate death of George Floyd at the hands of Minneapolis police has once again put the spotlight on the operational methodology of the police department at different cities around the USA. There is a chorus across the country, more so in the Democratic Party strongholds to do fundamental reorganization of the police force by focussing on community policing. Some of the extreme and radical activists have gone so far to demand “defund the police” and re-distribute its budget to marginalized communities, municipal corporations and necessity institutions.

“There is no magic switch to turn off and boom there’s no police department,” said Alex Vitale, a sociology professor at Brooklyn College. She released a book named ‘The End of Policing’. The book has become a manifesto for protests and police-reform advocates. The defund development calls for diminishing networks' dependence on police for various administrative problems like, observing the homeless, settling household quarrels, restraining understudies, reacting to upheavals by individuals with mental illness, paring down violence in neighbourhoods, and proportional reaction to minor inconveniences like somebody attempting to pass a fake $20, the allegation that set off the police call that resulted in Floyd's demise. The funds saved by reducing the workload of police could be utilised by social and community workers to resolve street feuds. “When we talk about de-funding the police, what we're saying is invest in the resources that our communities need,” Black Lives Matter co-founder Alicia Garza told NBC News.

There are cities which have approached this reform in a positive manner. New York Mayor Bill de Blasio has decided to shift the money from NYPD budget to youth recreational programs. A whopping $150 million is being pulled out of the LAPD by Los Angeles Mayor Eric Garcetti. This money is proposed to be invested in healthcare systems and build peace centres. Similarly Portland and Oregon have consented to pull police from state funded schools. A few Minneapolis organizations, including the government funded school region, the University of Minnesota and the Park and Recreation Board, have moved to diminish or end their agreements with city police.

Dallas has earlier experienced the positive results of diverting emergency mental health calls, not only on hospitals but also police to non-police establishment when in 2018 RIGHT Care  was provided $3 million funding to look after these issues. Since the program started, ambulances and emergency vehicle calls for individuals encountering emotional wellness inconveniences have declined in the south-local region of Dallas where the program works, which has opened up officials to manage different calls, authorities said. This transition was also done after the outcry over the shooting of a schizophrenic man holding a screwdriver in 2014 and subsequent defence of police personnel by the police boss David Brown.

Law enforcement officials and conservative activists believe that de-funding police would lead to an upsurge in criminal activities. President Donald Trump has started making this as a key plank of his re-election campaign while the Former Vice President Joe Biden, who is running against Trump, also came out against de-funding police.

It is therefore too early to predict whether the current phase of “Black Lives Movement” after the death of George Floyd will be successful in bringing some substantial reform in the working of police forces across the cities of the US or the momentum will be lost with some incremental tweaking here and there.  

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