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 4:46 PM

Plant- Microbial fuel cell: Generating electricity from green, living plants

Humans are capable of discovering and creating great things with the help of science and one such impressive discovery is that green, living plants can generate electricity. It may seem unbelievable, but not impossible.

One must be wondering how this technology works. Well, the answer is quite simple; photosynthesis. Plants excrete organic matter into the soil as a result of photosynthesis. Only some of the organic matter is used by plants and the rest is released in the soil. This released organic matter is broken down by bacteria. In the breakdown process, electrons are released as a waste product. Since the movement of electrons produces electricity, these electrons, which are of no use to the plant, can be harvested. The best part about this innovation is that the plants from which energy is being generated are not affected in any way.

This idea was first put into use by a Dutch start-up called Plant-e. This company was launched in September 2009 and is successful in launching and selling many environment- friendly products like DIY kits to the public for experimentation purposes and modular systems which could be easily installed on green roofs for abundant electricity production. Plant-e is involved in various projects, within The Netherlands, like automatic lighting systems in gardens and many more.

This technology works with the plants which thrive in moist soils and where the water is present in abundance. Therefore marshlands, paddy fields and deltas are some of the most suitable places for setting up plant batteries as a huge amount of water is present in those areas. Hence, the use of this technology is limited to certain geographic areas containing moist soils and cannot be used in arid regions. It may, however, promote the growth of more trees and plants which will gradually reverse the malicious effects of global warming.

Another obstacle in widespread adoption of this technology in today’s time is the high cost of installation of the system. The initial adopters of this technology are those who are attracted by the efficiency and eco-friendly nature of the plant batteries and willing to pay a premium for it.

The concept of plant batteries can be further taken into rural areas where most of the population still does not have access to adequate electricity. It is estimated that plant-MFC technology can cover upto 20% of European Union’s primary future electricity needs. Also, plants are almost 100% efficient at converting photons from sunlight into electrons which indicates a bright future for this technology. However, more research needs to be done in this field.

Another innovation in the field of green electricity is using algae , which often grows in ponds and rivers, for generating electricity. The basic concept which explains the working is similar to the way plants are able to produce electricity; photosynthesis.

Various other ventures in the field of renewable energy also include vegetable batteries, meaning, electric power generated from fruits and vegetables like lemons, tomatoes and potatoes, have been investigated. According to experiments, at least 3 to 4 vegetables are required just to light a small LED bulb. Moreover, it leads to poisoning of the vegetables and those food products need to be thrown away, without being useful for consumption purposes. It is therefore not a viable option for energy production.

Plant based electricity generation is still an evolving technology which has immense potential for producing energy in an environmentally sustainable way. It will realise full potential when the installation cost is attractive enough for the farmers to prefer it over the electricity grids or fossil fuel based personal electricity generator sets.

Read More