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

Thu Jul 12 18:07:37 EAT 2018

Alex

Thanks for that. You are quite right. Someone within the CRB space one told
me that if you apply for a loan for the first time your score is pretty low
because of the fact that there is no data on you.

Regards

*Ali Hussein*

*Principal*

*AHK & Associates*

Tel: +254 713 601113

Twitter: @AliHKassim

Skype: abu-jomo

LinkedIn: http://ke.linkedin.com/in/alihkassim
<http://ke.linkedin.com/in/alihkassim>

13th Floor , Delta Towers, Oracle Wing,

Chiromo Road, Westlands,

Nairobi, Kenya.

Any information of a personal nature expressed in this email are purely
mine and do not necessarily reflect the official positions of the
organizations that I work with.

On Thu, Jul 12, 2018 at 12:36 PM, Alex Watila via kictanet <
kictanet at lists.kictanet.or.ke> wrote:

> Good afternoon,
>
> It actually is happening in Kenya. The longer you stay without a loan the
> lower your score becomes.
>
>
>
> Also in the western world, people that do not need a loan still take them
> to keep up their credit scores.
>
>
>
> Call it the cost of living in a data analytics driven world or is it wrong
> assumptions built into the algorithms?
>
>
>
> Regards,
>
>
>
> Alex Watila
>
>
>
> *From:* kictanet <kictanet-bounces+awatila=yaho
> o.co.uk at lists.kictanet.or.ke> *On Behalf Of *Grace Bomu via kictanet
> *Sent:* Thursday, July 12, 2018 10:19
> *To:* awatila at yahoo.co.uk
> *Cc:* Grace Bomu <nmutungu at gmail.com>
> *Subject:* Re: [kictanet] Kenya IGF Online Discussions. Day 3.
> Developments in Fintech and E-commerce
>
>
>
> @ Indeje, I wonder whether we are being driven to a "you must have a
> credit score" world and thereby a situation where one might have to take a
> loan just to get a credit score.
>
>
>
> 2018-07-12 10:12 GMT+03:00 David Indeje via kictanet <
> kictanet at lists.kictanet.or.ke>:
>
> As regards 3. How about the Credit Reference Bureaus? Are they stuck in a
> time warp or is the legislation in place encumbering them from innovation?
>
>
>
> I once spoke to KBA's Dr. Habil Olaka and he noted that the CRB's role in
> the market has not been achieved as it is currently constituted.
>
> According to him, CRB was not to play the role of blacklisting persons who
> have defaulted but rather to inculcate an environment where people become
> responsible and
>
> similarly,
>
> help financial institutions to better price a person who is seeking
> financial help.
>
>
>
> This is a reason that led to the launch of the Loan Calculator by the KBA.
> There reasoning was it is better to get a loan from a bank rather than the
> mobile lending platforms.
>
>  However, in line with what @GraceBomu notes on mobile lending, FSD in
> their 2017 report <http://fsdkenya.org/annual-report/2017-annual-report/>
> recommended that "As the market for digital loans grows and diversifies,
> further research is needed to help build a more complete and timely picture
> of how and whether these products can improve Kenyans’ lives."
>
>
>
> On Regulation: CBK has the best answer on how it regulates mobile lending
> institutions so that they are differentiated from the banks. However, I
> agree with BBK MD Jeremy Awori who says "Excessive control and regulation
> does not help the market. This is adding a lot of bureaucracy and cost,
> which will find its way to the charges of products" he spoke this
> yesterday.
>
> Same sentiments have been raised by Safaricom and also the CBK
> <https://www.businessdailyafrica.com/markets/marketnews/Proposed-finance-law-will-cripple-CBK--says-governor/3815534-4585524-dt5vtiz/index.html>
> as regards to the new Financial bill
>
>
>
>
>
> *Kind Regards,*
>
> *David Indeje *
>
>
>
>  +254 (0) 711 385 945|  +254 (0) 734 024 856      Khusoko
> <http://bit.ly/2eJF9B4>
>
>   <https://www.facebook.com/DavidIndeje/>
> <https://twitter.com/David_Indeje>
> <http://ke.linkedin.com/pub/david-indeje/17/7b9/647>  Skype: david.indeje
>
>
>
>
>
> On Thu, 12 Jul 2018 at 09:47, Grace Bomu via kictanet <
> kictanet at lists.kictanet.or.ke> wrote:
>
> 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.
>
>
>
>
>
> Regards,
>
>
>
>
>
> Il giovedì 12 luglio 2018, Ali Hussein via kictanet <
> kictanet at lists.kictanet.or.ke> 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.
>
>
>
> https://home.kpmg.com/ke/en/home/insights/2018/06/finance-
> bill-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: http://ke.linkedin.com/in/alihkassim
>
>
>
> "We are what we repeatedly do. Excellence, therefore, is not an act but a
> habit."  ~ Aristotle
>
>
>
>
>
> Sent from my iPad
>
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> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
> for people and institutions interested and involved in ICT policy and
> regulation. The network aims to act as a catalyst for reform in the ICT
> sector in support of the national aim of ICT enabled growth and development.
>
> KICTANetiquette : Adhere to the same standards of acceptable behaviors
> online that you follow in real life: respect people's times and bandwidth,
> share knowledge, don't flame or abuse or personalize, respect privacy, do
> not spam, do not market your wares or qualifications.
>
>
>
>
> --
>
> Grace Mutung'u
> Skype: gracebomu
> @Bomu
> PGP ID : 0x33A3450F
>
>
>
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>
> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
> for people and institutions interested and involved in ICT policy and
> regulation. The network aims to act as a catalyst for reform in the ICT
> sector in support of the national aim of ICT enabled growth and development.
>
> KICTANetiquette : Adhere to the same standards of acceptable behaviors
> online that you follow in real life: respect people's times and bandwidth,
> share knowledge, don't flame or abuse or personalize, respect privacy, do
> not spam, do not market your wares or qualifications.
>
>
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