Mobile money services has increased the proportion of Kenyans accessing financial services to 82.9 per cent, showing the significance of services such as M-Pesa and Airtel money in the economy.
The rise, contained in the 2019 Financial Access (FinAccess) Household survey, is from 75 percent in 2016 and 27 per cent in 2006, leaving only 11 percent with no access to any formal financial service.
Central Bank of Kenya (CBK) governor Patrick Njoroge Wednesday attributed the increase to growth in mobile money, government initiatives and developments in ICT.
“The significant reduction in the proportion of the adult population totally excluded from financial services and products vindicates the policies, strategies and reforms undertaken by the government as well as widespread adoption of digital technology and innovations by financial sector players,” said Dr Njoroge.
According to the report, use of mobile money, mobile banking and digital applications has risen substantially. Airtel Kenya CEO Prasanta Sarma says the trend offers new opportunities.
“The way mobile money is growing is a big opportunity for us to continue in the inclusion agenda as we serve new needs of customers,” he said.
Nairobi and Mombasa top in financial inclusion at 96 per cent and 94 per cent respectively followed by central Rift Valley region (88 per cent) and Central at 85 per cent. North Rift valley has least inclusion at 57 per cent.
Compared to 2016 inclusion, fastest rise was in Western and Coastal regions at 13 percentage points. Central is the only region where financial inclusion dropped (down by two percentage points).
Despite the progress, the study by CBK, Financial Sector Deepening (FSD) Kenya and Kenya National Bureau of Statistics notes that affordability and consumer protection issues remain barriers to access.
“Many Kenyans have formal accounts in various forms but these accounts are rarely used because they are not solving real day-to-day problems for many households, smaller and micro scale businesses and farmers,” said the study.
Informal finance still remains strong even among Kenyans with access to formal services. Over 60 per cent of Kenya still use informal solutions such as chamas, cash savings at home and borrowing from friends or shopkeeper, according to the survey.
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.