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 4:38 PM

US Legislature: Senate and House of Representative

US Congress

Congress of the United States, the legislature of the United States of America is established under the Constitution of 1789. It is structurally separate from the executive and judicial branches of the government. The United States Senate is the upper House of the United States Congress, and the House of Representatives is the lower House of the United States Congress. Together, both these houses make up the legislature of the United States. Although the two chambers are separate for the most part, the House and Senate are equal partners in the legislative process, and the legislation cannot be acted without the consent of both chambers. Congress must assemble at least once in a year and must agree on the date of convening and adjourning. The decided time for convening, according to the Twentieth Amendment, is January 3. The House and the Senate vote the date for adjournment. Congress must also come together in a joint session to count the electoral votes for the President and the Vice President. 

United States Senate 

The United States Senate, the upper House of the United States Congress, was established in 1789 under the Constitution. Each state elects two senators for six years. One-third of the Senate membership expires every two years. It is hence also nicknamed as “the house that never dies”. The role of the Senate is to provide equal representation to each state regardless of their size and population. Washington, D.C. houses the chamber of the United States Senate. Election to the Senate was indirect up till 1913 and changed to direct election by the Seventeenth Amendment. The Senate shares responsibility with the House of Representatives for law-making within the United States of America. 

The Senate has exclusive powers which are not granted to the House of Representative. The powers include the authority to consent to treaties before giving it for consent, confirming the appointment of -- Cabinet secretaries, federal judges and executives, military officers, regulatory officials, ambassadors, and other federal uniformed officers. The Senate is also responsible for trying federal officials that have been impeached by the House.

The qualifications for Senators are as follows:

  1. They must be at least 30 years old. 
  2. They must have the citizenship of the United States of America for at least nine years.
  3. They must be an inhabitant of the state they are representing. 

House of Representatives

The House of Representatives is the lower House of the United States Congress which was established in 1789 by the Constitution of the United States. It shares equal responsibilities of law-making with the Senate. The House is designed to give a voice to people of every local voting region of America. Members of the House stand for reelection every two years. Each state is split into districts and each district votes for one representative. The number of districts depends on the population of each state. The candidate with the most number of votes wins the seat in the House, and the party with the most number of seats takes control.

The primary responsibility of the House is to pass federal legislation that affects the whole country. For the bill to become a law the Senate has to agree and the United States President has to finally sign it. The House, like the Senate, has special powers too. These include the power to initiate revenue bills, to impeach officials, and to elect the President in case there is no majority in the Electoral College.

The House is organised in the committee system, under which the membership is divided into specialised committees like committees for holding hearings, preparing bills for the consideration of the entire House, and regulating the House procedure. The member of the majority party chairs these committees. Almost all bills are first referred to the respective committee. There are approximately 20 permanent committees, each having subcommittees. 

The qualifications for members of the House are:

  1. They must be at least 25 years of age.
  2. They must be a U.S. citizen for at least seven years. 
  3. They do not need to reside in the constituency that he represents.

Articles that were referred to:

  1. https://www.whitehouse.gov/about-the-white-house/the-legislative-branch/#:~:text=The%20Senate%20maintains%20several%20powers,confirmation%20of%20the%20Vice%20President.
  2. https://www.britannica.com/topic/House-of-Representatives-United-States-government
  3. https://www.congress.gov/help/learn-about-the-legislative-process/how-our-laws-are-made
  4. https://courses.lumenlearning.com/boundless-politicalscience/chapter/the-nature-and-function-of-congress/
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