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 4:36 PM

Black Lives Matter: Solidarity protests in Western Europe

The killing of the African-American George Floyd in the hands of Minneapolis police commanded world attention. It witnessed Pan-American protests against police brutality and racism. Countries across the world have stood in support of these protests against racial violence. These protests in America have triggered a number of protests across Western Europe to localise them and condemn racism in their own countries.

Protests against racial violence and police brutality drew large numbers across European capitals and other prominent cities as well. Paris protests alone saw an estimated 20000 people near the Eiffel Tower who protested against the death of George Floyd. These protesters tried to localise the issue of racial violence and police brutality by taking up the case of Traoré, a young black man whose family claims that he died due to suffocation under police custody at Persan (north of Paris) in 2016. These protests have been going on consistently for over a week. Despite the police ban on demonstrations in Paris due to the risk of COVID-19, the demonstrations couldn’t be curbed. Parallel protests were also reported in other cities of France like Lyon, Rennes and Marseille.

Berlin also has been sustaining its ‘Black Lives Matter’ protests for over a week. Demonstrations were held in other German cities such as Cologne, Frankfurt and Dusseldorf. The Bayern Munich footballers wore T-shirts with slogans that read ‘Red card against racism- Black Lives Matter’ in their match against Leverkusen to raise awareness against racial violence. Various German activists believe Floyd’s death has not only triggered anti-racist protests but also multiple questions regarding equitable distribution of resources and representation of diverse races that co-habit in Germany.

In the United Kingdom, too, despite the COVID-19 risk, a large number of protestors stood in solidarity with the U.S protests. In Bristol, demonstrators pulled down the statue of slave trader Edward Colston on 7 June, 2020. Even though these protests were against racial violence, the chords of the protests mainly struck with issues of blacks during COVID-19. British government data showed that blacks living in British were four times more likely to die from COVID-19 as compared to whites. This discrimination by the virus can be attributed to the institutionalised nature of racism and the lack of equitable access to resources for minorities living in Britain.

Protests were held widely in Spain. The U.S embassy outside Madrid has become one of the hotspots for protestors to gather. Hundreds gathered to mourn the death of Floyd and observed silence for him. The city of Budapest too observed silence and chanted songs outside its U.S embassy.

European media has also played a key role in actively condemning Trump for his actions of using military force to tackle the protests. While the French Newspaper Le Monde in its editorials has dubbed Trump as ‘President of division’ the Spanish newspaper El Pais’s headlines read ‘The U.S. Faces Its Worst Racial Conflict in Half a Century’. Trump’s actions to use federal force and active duty military personnel have made the European media to cover the protests more extensively. Newspapers coupled with social media have acted as catalysts in spreading the cause of the protests at a much faster rate.

Floyd’s killing sparked protests against racial violence and systematic racism around the world. However, it resonated at a deeper level with Western European countries primarily due to their rising number of immigrants from African and Arab countries. These countries, for decades, have struggled with accommodating these minorities equally with the mainstream population. The approach to localise these protests has helped to not only denounce racial violence in America but also in their own home country. The nature and extent of these protests have pointed out that governments no longer have the luxury of gradualism and have to instead take up swift actions to eliminate institutionalised racism and police brutality.

Read More