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 4:53 PM

Assam Floods 2020: What no one is talking about

With the COVID-19 pandemic under limelight this year, many other devastating incidents are sadly being pushed under the carpet. The raging floods in Assam, a North-Eastern province of India, is one of the scenarios not receiving much attention.

The flooding of third longest river of the world, Brahmaputra and its tributaries have claimed more than 75 human lives and affected a population of over 300 thousand. This is a lot more than the number of people affected due to COVID-19 in India.

As per the Assam State Disaster Management Authority (ASDMA), 26 of 33 districts across the state are badly affected. Roughly 85% of Kaziranga National Park, which is a UNESCO world heritage site and a home to the rare one-horned rhinoceros, is submerged under water, killing as many as 100 animals including nine rhinos. Hundreds of other animals are fleeing the inundated forests and seeking refuge in the nearby villages.

Landslides triggered due to floods have resulted in approximately 25 deaths. Additionally, the fire which broke out at a gas well of Oil India Limited (OIL) in the Tinsukia district of eastern Assam displaced many people from their houses, destroyed tea gardens and polluted Maguri-Motapung Beel, a nearby water body. The fire was so severe that even a month was not enough to extinguish it completely.

However, the state government is doing their best in turning schools and similar places into relief camps and distributing necessities like food, masks and sanitizers to the displaced. Nearly 125 animals have been rescued.  “We have 40 teams of the State Disaster Response Force in the worst-hit areas and the army also is on standby,” says M.S. Mannivanan, head of ASDMA, as of July 16, 2020. Almost 50,000 people are seeking refuge in more than 600 relief camps.

PM Modi finally spoke to Sarbananda Sonowal, Chief Minister of Assam on July 19 and enquired about the floods and the fire which broke out at OIL. He assured his full support as well. The United Nations has also lent a helping hand, stating that it is ready to support the Indian Government, if need be.

Keeping the current pandemic in mind and adhering to the guidelines of social distancing, more areas have been converted into relief camps. Usually, a space of 3.5sq m is allocated to every individual. Whereas now, due to the current circumstances, every person gets double the area. Strict rules are also being followed to ensure safety and hygiene. Fortunately, there are no reported cases from these camps, as of July 19, 2020.

Along with relief camps, many distribution centres have also been set up across 21 districts of Assam. The authorities have distributed about 7 lakh kilograms of staple food items like rice, dal and salt along with roughly 11,000 litres of mustard oil and other required goods, as of July 13, 2020.

The devastating floods which is a recurring phenomenon in Assam indicates that extreme events are now more likely to occur as our weather patterns continue to deteriorate due to climate change. These incidents are merely showcasing the power nature which is unleashed from time to time as a warning to the humankind.

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