Kenya IGF Online Discussions. Day 3. Developments in Fintech and E-commerce

Hi Ali,
​With regard to the question of mobile money lending, it is a subset of
micro finance in many ways. It definitely ​leads to more financial
inclusion for the unbanked and provides credit to those who would normally
not be targeted by banks. However, the interest rates are sometimes so high
that one wonders if the goal is financial inclusion or bondage through
credit. There needs to be more transparency by the lending apps not only
about their rates but how these are derived, what data they hold and for
how long. The money lending apps are also marketed in isolation from other
important information that one needs in order to make the most out of
credit. In comparison to microfinance for example, the institutions take
time to educate borrowers about finance, business plans, loan repayment
plans etc. There are also social structures like women groups or SACCO
groups that assist borrowers to reach their goals with the money they
borrowed. This is a gap with mobile money lending apps which are more
impersonal and agnostic about the purposes for borrowing.


Il giovedì 12 luglio 2018, Ali Hussein via kictanet <> ha scritto:

> Dear listers.
> Since the advent of Mpesa, Kenya has been recognized as Ground Zero for
> Mobile Money/Payments Innovation the world over. According to a World Bank
> report one in every ten human beings regularly using mobile money is a a
> Kenyan.
> Over the last few years Fintech (Financial Technology) has become all the
> rage. American startups are setting up in Kenya. The more common ones that
> we know are Branch and Tala who combined have raised over $150m of venture
> funds in the last few years. These two are mainly mobile lending platforms.
> Insuretech is taking root. Payment Platforms are proliferating. Banks are
> jumping onto the Fintech Bandwagon with mainstream banks like Barclays and
> HF Group launching their mobile lending apps. Equity Bank boldly announced
> a few weeks ago that they are building an API Bank. Banking as a Service as
> it were.
> Not to be left out, Blockchain and it’s offspring, Bitcoin is threading to
> complete the upheavals in the financial sector. On top of it all the
> government is playing catch up on regulation with the announcement of the
> Finance Bill 2018. See analysis from KPMG on this.
> ll-2018-analysis.html
> To ponder:-
> 1. Are we moving too fast? Is there a need to take a chill pill and
> reflect on the gains and achievements of the sector? Should we regulate
> lightly or heavily?
> 2. Should we regulate and cap the mobile lending platforms? Are they
> playing a crucial role of financial inclusion or are they just loan sharks
> on steroids?
> 3. How about the Credit Reference Bureaus? Are they stuck in a time warp
> or is the legislation in place encumbering them from innovation?
> 4. Lastly is the BlockChain conversation being overhyped? And how do you
> separate the technology from the cryptocurrencies it spawns?
> Over to you Listers.
> *Ali Hussein*
> *Principal*
> *AHK & Associates*
> +254 0713 601113
> Twitter: @AliHKassim
> Skype: abu-jomo
> LinkedIn:
> \”We are what we repeatedly do. Excellence, therefore, is not an act but a
> habit.\” ~ Aristotle
> Sent from my iPad

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