Kenya Insights

Tag: Okash

  • How Mobile Money Credit Apps Are Used For Mass Surveillance On Kenyans

    How Mobile Money Credit Apps Are Used For Mass Surveillance On Kenyans

    Keren Weitzberg, a researcher and educator based at University College London, and who’s currently working on a project on ID cards and biometrics in Kenya has opined that the growing mobile credit apps in Kenya are used for surveillance. According to her report “Mobile credit expands mass surveillance of ordinary Kenyans”, governments and corporations are using the digital credit services to expand their reach into people’s everyday lives. Financial technology, or fintech, is selling  Kenyans data, their routine and habits and transforming their behavior into data that can be monitored and assessed.

    The report names Safaricom – a partly government-owned multinational telecom that controls the lion’s share of the Kenyan market – in partnership with Uhuru’s partially owned CBA bank as huge contributors to this huge breach of Kenyan citizens data. Safaricom has a lending service itself  (M-Shwari) and as both tax collector and shareholder, the Kenyan government has a direct financial stake in Safaricoms digital lending. Through mandatory SIM registration laws in the country, Safaricom is also collecting a great deal of data on their customers and consumer habits in what the watchdog group Privacy International called “a more pervasive system of mass surveillance” throughout Africa.

    These digital lending companies ask for access into the lives of ordinary Kenyans before giving out loans which Kenyans readily agree to. They use everything from GPS data to how often people call their parents to social media feeds to assess customers’ creditworthiness. The companies collect M-Pesa transaction SMS, call behavior and handset information and due to lack of sufficient protection laws in the country the  mobile apps make profit by disclosing users’ information to third parties.

    Most Kenyans are already struggling to make ends meet and digital lending apps are not the solution, Infact they are more likely to worsen poverty by contributing to cycles of indebtedness, but in a country led by a man who has glorified borrowing with absolutely no regard for it’s citizens data, The Mpigs would rather use their time to come up with useless bills to tax bloggers and group admins rather than regulate this Digital-Fueled lending craze.

  • CBK Directs That CRB Shouldn’t Blackist Anyone Until Six Months

    CBK Directs That CRB Shouldn’t Blackist Anyone Until Six Months

    Central Bank of Kenya has nullified listing of loan defaulters to credit reference bureau.

    Millions of Kenyans have been listed on CRB, which permanently blocks them from accessing another loan before clearing with them at a fee.

    CBK has issued a new directive to commercial banks,m stating that a borrower will only be considered to have defaulted a loan after six months and will not be listed on CRB before that.

    The directive comes at a time when lenders had forwarded more than 2.7 million Kenyans to be listed on the CRB for defaulting their loans.

    According to CBK, the directive will affect both mobile loans and normal loans, which implies that, Kenyans will only be listed on the CRB only after defaulting a loan for six months.

    However, CBK’s directive doesn’t affect digital lenders like Tala, Branch, Okash, who forward millions of Kenyans for listing on credit reference bureaus after failing to pay a loan within 30 days.

    Currently, CRB has listed more than 2.7 million Kenyans with 500,000 of them having defaulted loans of 200 shillings and below.

    Research indicates that we have more than 500 digital lenders who give Kenyans instant loans via their mobile loans.

    Currently 90 percent of borrowers in Kenya are accessing loans via mobile loan apps.

    Commercial banks, microfinance, and CBRs were given three months period to adjust and start using the new guidelines.

    Template given in the new directive will classify non-performing as per prudential guidelines which state that “any loan, which is past 180 days shall be classified as doubtful.”

    Millions of Kenyans have been calling CBK to regulate mobile money lenders who are charging exorbitant interest rates on desperate Kenyans.

    It pains many to see how CBK has thrown people’s biggest problem under the bus.

    Digital lenders have blocked financial freedom for millions of Kenyans. Something doesn’t add up in all this.

    How do you skip a complain where someone who has been forced to pay CRB sh2,200 for a clearance certificate because he was listed to to the bureau for defaulting 200 shillings?

    The same Dr. Patrick Njoroge, CBK’s governor who once termed mobile lenders as “enhanced Shylocks who use digital platforms to prey on Kenyans with high-interest rates on their micro-loans.”!