We have felt the immediate shock of key digital money utilities going offline, whether as a consequence of adhoc platform issues or scheduled maintenance that is often announced beforehand.
The inconvenience that is experienced when these platforms skip a beat, slowly gnaws on the gains made with going cashless and continues to support the currently entrenched place of cash that carries no surprises with it.
Even as Safaricom’s M- Pesa sneezed, much to the chagrin of many stuck at various points of purchase, we must appreciate that no platform is infallible. Outside of cash and the ‘yet to scale distribution-wise’ cryptocurrency, the other option is plastic.
Unknown to many Kenyan’s, Mastercard and Visa, have both suffered outages at scale this year. First was VISA on June 1 this year with an outage that lasted 10 hours and affected over two million transactions, followed only weeks later by Mastercard.
I would like to share a thought, as incomplete as it comes on what could possibly be a silver bullet to buffer consumers against crippling outages.
The Central Bank of Kenya is meant to ensure safe and efficient payment and settlement systems in support of an efficient financial sector, so logically this solution would sit there, whether manifest as a direct service offering or fully owned subsidiary.
Borrowing from M-Pesa, where user funds are held in trust, the CBK could create a similar vehicle with the additional feature of carrying a daily interest benefit. Unlike mainstream banks, this service would not carry out any traditional lending nor engage in retail and commercial lines but instead only play in the interbank lending space.
The secret sauce would lie in the opening up of this pooled digital vault by the CBK to the rest of the licensed financial services fraternity via application programming interfaces for them to build channels both in and out and thereafter layer services atop.
This would change the game somewhat as it now boils down to service innovation, user experiences, growth tactics and business models of those invested in the space.
With multiple ways of accessing one’s funds coupled with links to service bouquets but from different financial service providers, suddenly the risk to the economy is reduced by several factors and consumers freed from the anxiety of having only one rail through which to access their funds and employ them for various disparate uses.
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.