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EDITORIAL: Directive barring PSV fare increases is vague

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PSV operators have increased fares by an average of 20 per cent after fuel prices rose over the new tax. FILE PHOTO | NMG 

President Uhuru Kenyatta’s directive to the National Transport and Safety Authority (NTSA) to target public service vehicle (PSV) operators who have increased fares in the wake of the recent increase in petroleum tax is worrying.

Mr Kenyatta has argued that his fiat arose from utter concern that local transporters are taking advantage of the new fuel levy to disproportionately increase fares, making life difficult for ordinary folks.

To this end, the President warned that any public transport operators found charging fares beyond the recommended levels will lose their PSV licences.

This order is problematic for a number of reasons. First, there is no specific guide as to what constitutes “overcharging passengers”, making the directive vague and opening transporters to abuse by overzealous officers.

Besides, matatu operators say the fares displayed inside their motor vehicles are only a guide meant for passengers and are not legally binding to the extent that NTSA can enforce as the President has directed.

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Second, and perhaps more importantly, Mr Kenyatta’s order is not backed or anchored in any law – raising the question as to his commitment to the rule of law. Without a clear legal mandate, our conclusion can only be that such directives are solely driven by populism that lacks a grounding in the economics of situation.

The only source of comfort is that because the NTSA is not legally mandated to set fares for PSVs, the order is unlikely to ever be enforced.

Yet this has not prevented the uproar that Mr Kenyatta’s utterances has caused in the public transport sector.

It must be stated that the dictates of the free market economy in which we operate demand that market forces determine the cost of goods and services – including ticket prices.

While a degree of government intervention exists in nearly all free-market economies, ticket prices in Kenya’s mostly private-run transport sector must be left to the forces of competition.

That is because profit is the ultimate reward for the investor who undertakes risk. An economic environment where the State has shown that it could interfere either on the basis of populism or arbitrarily collection of higher taxes has the effect of making potential investors jittery and spooking the system.

That must not be allowed to happen.

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World Bank pushes G-20 to extend debt relief to 2021

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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.

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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.

ALSO READ:Global Economy Plunges into Worst Recession – World Bank

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Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans

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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.

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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.

SEE ALSO: Central Bank Unveils Measures to Tame Unregulated Digital Lenders

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Scope Markets Kenya customers to have instant access to global financial markets

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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.

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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.

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