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 4:47 PM

Kitchen Garden: An unusual arsenal in Kenya’s fight against malnutrition

Vegetable gardens have been in vogue since long across the world as a hobby to source  some fresh vegetables for household consumption. However in Kenya, the government and citizens both have moved towards taking it to the next level.

Hassani Oyo, a musician and resident of Nairobi, Kenya, has started vertical bag gardening in the backyard of his home to grow exotic vegetables like cabbage, spinach and kale for his own use as well as for sales to his neighbours and local vegetable vendors. This low cost method of gardening uses minimal farming space and very less water.

Another gardening story emerges from Busia County in western Kenya. where a local community-based organization, Sustainable Income Generating Investment (SINGI) is promoting the use of Kitchen Gardens. SINGI in partnership with other organizations are actively involved in training farmer groups about healthy agricultural practices and sharpening their production skills.

Roselida Orodi, the chairperson of Esikoma Ushirika Farmers Self Help Group states that, “Most households produce enough vegetables for domestic consumption with a surplus which is usually sold to the local market and beyond”. The biggest advantage is that these vegetables are able to withstand high temperatures. During summer, when the demand increases, they are usually sold for higher prices to earn good profits.

Jessica Muhonje of Singingire vegetable farmers group, says that she sells vegetables worth 15 U.S dollars per day. With indigenous vegetables gaining popularity, she adds that, “People flock to my homestead to purchase the vegetables”.

Kenyan government has also launched the “One Million Kitchen Gardens Plan” for households across the country. Brainchild of Agriculture Chief Administrative Secretary, Anne Nyaga, the program aims to use kitchen gardens as a tool to achieve food security, fight malnutrition, and to deal with the food crisis caused by the Covid-19 pandemic. In the initial phase kitchen garden kits were provided to 15,000 households of  Makueni county. “We would like to put emphasis on a balanced diet through these kits so that we can be able to boost our immunity and create an immunity that is able to fight COVID-19 and other diseases” says Anne Nyaga. She also adds, “The government is launching a campaign to establish kitchen vegetable gardens, we have issued guidelines to support both rural and urban dwellers with technologies for setting up within the resources available”.

These success stories inspire many others to join the kitchen garden bandwagon in Kenya. Setting up a kitchen garden is not tough, according to Mr. Oscar Ludelu, a landscaper and horticulturist. However, a few factors, like cost and what type of garden one needs is to be kept in mind before starting a kitchen garden.

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