Agency banking is fast losing its appeal after pensioners and beneficiaries of State funds ditched the service for mobile banking in 2018.
Payment of retirement and social benefits through agency banking last year declined significantly by 94 per cent to Sh1.1 billion from Sh19 billion in 2017, with most recipients opting for a mobile banking-enabled payment service.
Moreover, payment of utility bills such as electricity is also shifting to mobile money. Payment of bills through bank agents dropped from Sh13.7 billion in 2017 to Sh11.6 billion, though the platform remained popular for cash deposits and withdrawals.
The value of banking transactions undertaken through agents increased from Sh1 trillion in December 2017 to Sh1.18 trillion in December 2018, according to a new report by the Central Bank of Kenya (CBK).
This growth was mainly driven by cash deposits which grew by 14.4 per cent to Sh906 billion from Sh791.7 billion the previous year.
Cash withdrawals in the period under review grew by 7.6 per cent to Sh269.1 billion from Sh175.2 billion in 2017, even as Sh458 million was transferred through the bank agents.
“Despite the overall increase in the value of transactions, there was a decline in transactions relating to payment of retirement and social benefits and payment of bills in the year 2018,” said CBK in the report.
A new payment model, Inua Jamii, transfers regular stipends to beneficiaries who include people over 70 years and orphans.
“One of the important benefits of the new programme is that it reduces distances covered by beneficiaries in accessing banking services as well as reducing over-reliance on care givers by giving beneficiaries more control of their accounts,” said Labour and Social Protection Cabinet Secretary Ukur Yattani last year when they unveiled the programme.
The programme targets a total of 1.3 households, with around five million Kenyans being direct beneficiaries. Since its inception in 2004, the government has spent Sh125.7 million.
Inua Jamii operates through four banks – Cooperative, Equity, Postbank and KCB. The method is mobile banking-enabled where beneficiaries are able to pull their money directly from bank accounts and withdraw from mobile money agents.
Consumers are also trying to reduce distances in accessing banking services when paying bills. As a result, payment of bills through agency banks reduced by 15.5 per cent from Sh13.7 billion to 2017 to Sh11.6 billion in 2018.
During the period under review, 19 commercial banks and five microfinance banks had contracted 59,578 and 2,026 agents, respectively, recording a decrease from 61,290 and 2,068 agents respectively by December 2017.
SEE ALSO :Jambopay on track to offer mobile money
The change implies a decline of 2.8 per cent (1,712) and 0.02 per cent (42) in the number of agents contracted by banks and microfinance institutions.
“The decline is attributed to the closure of some of the agents due to low business volumes and low income earned by the agents, rendering the agents inactive,” said CBK.
Do not miss out on the latest news. Join the Standard Digital Telegram channel HERE.
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.