The Standard Media Group and Equity Bank have signed a partnership deal that will see the former’s 3,500 newspaper vendors given loans to ease their cash flows.
The loans will be extended via Equity’s mobile virtual network, Equitel, helping the vendors to increase their stock and deepen the bank’s lending to small and medium-sized enterprises (SME).
Equity Bank Kenya Managing Director Polycarp Igathe said Wednesday at the signing of the deal at the Standard Group offices in Nairobi the bank would also extend the credit facility to its agents to open up a network of over 35,000 vendors.
The facility wired through the media house will be collateral-free with varying ticket sizes depending on the vendor’s needs.
“This is a partnership to create working capital finance without collateral. All we have to do is identify a certified vendor through knowing your customer credentials from the corporate,” said Mr Igathe.
He said working with corporates was an ideal way of accessing the micro small and medium enterprises (MSMEs), which are currently suffocating from the lack of credit.
“We are impressed that a media house thought of this before consumer goods. If it works with a newspaper, it will work with soda and cement industry players. It’s a deliberate decision to go into certified ecosystems to access MSMEs working with brands like the Standard Group,” said Igathe.
Standard Group Chief Executive Orlando Lyomu said the partnership would come in handy for vendors to address their cash flow problems.
“We are proud of partnering with Equity Bank with a heritage of innovative culture as we focus on getting the value to ourselves and distributors and working with vendors to access the product easily,” said Mr Lyomu.
In the long-term the partnership targets funding for TV programming to boost local content and promote local talent. Under the rate cap law, banks’ ability to channel credit to the private sector has been curtailed by narrow margins against heightened risks.
This has seen them divert most of their money to the Government through treasury bills and bonds which carry lower costs of processing and have no risks.
However, with virtually all banks lending to the State, returns are lower, leading to flat interest growth.
This has, in turn, led banks to seek other areas of the economy where they can lend safely to SMEs.
Corporate guarantees offer lenders like Equity knowledge of their partners’ data and balance sheet strength to help them make decisions faster and reduce exposure to riskier borrowers.
Mr Igathe said through the Equitel mobile virtual operator, the bank will be able to disburse loans in a record 20 seconds.
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.