Digitisation has fundamentally changed various industries in Kenya and continues to disrupt our everyday lives like electricity and the railroad did in the industrial Revolution in the 18th century. Just like electricity ended the Standard Oil Corporation’s monopoly of lighting homes with kerosene so will technology revolutionise every industry.
A digital revolution is underway and as a banker I can authoritatively say the banking industry has been the most dynamic. I have seen innovation democratize banking from serving our customers over the counter to launching more branches and working with agents to reach more customers as well as introducing ATM machines and debit cards to the launch of Internet Banking including mobile-based banking.
As digital enterprises, financial institutions of the future are using digital technology to offer banking as a service and reach customers away from the traditional brick-and-mortar branch and ATMs.
But bankers are not the only ones innovating. As we speak IBM is working with an ag-tech social enterprise called Hello Tractor to launch a digital wallet and data tool for farmers.
Something like an ‘Uber’ or “Little” for tractors, the ag-tech social enterprise will collect information to help connect farmers to tractor owners and tractor owners to banks for asset financing.
Hello Tractor is working out of IBM’s research lab in Nairobi, Kenya and is trying technologies such as Watson Decision Platform for Agriculture, Blockchain, IoT and cloud, to bring new services to the app for tractor owners and dealers, farmers and financial institutions.
Before Hello Tractor, Kenya’s Twiga Foods announced its working with IBM to deploy blockchain to solve farmers supply-chain and credit access problems in Kenya. If these examples look hard, look at how Jumia has brought most electronic vendors online to build an ‘Amazon’ of Africa. Jumia is reportedly a billion dollar company now or a ‘unicorn’ as mostly called in the US. Little and Uber are also great examples which have made transport easy by giving users access to cars anytime they need them.
These platform-like innovations are not new to Kenya, a ‘Harambee’ nation, where the idea of pooling resources together is not new.
With the advent of the Internet, banks introduced internet banking. However, with the popularity of the mobile phone, mobile banking was inevitable. Kenya’s M-Pesa, launched by Safaricom in 2007 revolutionised mobile banking.
Before long, financial institutions ushered in innovations such as KCB’s KCB M-Pesa, Barclays Bank’s Timiza, Maisha Microfinance Bank’s mobile banking platform dubbed M-Doh and Equity Bank’s Eazzy Banking. CBA’s mobile loans and savings platform M-Shwari has been complemented by newer non-bank digital platforms such as Tala, Branch and many others.
Microfinance banking institutions have also not been left behind in adopting technology to drive their financial inclusion agenda and expand outreach. Maisha Microfinance Bank’s savings and loans solution, M-Fanisi is democratising access to credit by reducing customers’ dependence on ATMs, Internet banking and visits to the branch and also enhancing a savings culture in Kenya.
Financial institutions are digitising everything they have been known for including loans, savings and financial advice so as to win the customers loyalty.
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.