Gov job is to regulate banks - and these mobile loans need regulation. You cannot charge daily interest of 2% - which annualized is 365*2 - 700% - which country will allow you to do that. CBK should ensure banks charge reasonable interest. Gok job is to protect people from shylocks like Fuliza.
Besides this - we should open Mpesa for many banks to compete - for now NCBA and KCB together with Safaricom have locked this - and have undue advantage.
Mpesa overdraft should be open for all banks to compete on the cheapest interest. You should see a menu saying Fuliza from Equity 3%, KCB 2.9%, etc. This will allow proper prize discovery after brutal competition. Without this Safaricom and their two partners collude to create a monopoly in the digital overdraft loan. That is not capitalism. That is oppression.
So there is regulation required - in many levels - beyond your simplistic mind.
It appears to me Mpesa need to be open platform...for all players to enjoy same advantages...tight coupling with Safaricom.
It's a very simple principle,
If you can't pay your debt you either don't get debt or get it at high interest rates..This principle applies to GOVERMENT corporate upto individual debt which is where FULIZA applies.Like Kenya pays higher interest rates vs USA 10% and 2% respectively.
If you transact lots of money,earn 1MN per month and have no unpaid debt you are able to FULIZA even 300k.
If you earn 10,000 Bob you have unpaid loans then you can only FULIZA 200 Bob and because you can't pay it in 3wks and most likely default then pay more.
Ruto has done NOTHING AT ALL.JUST HOT AIR.
NJIA YA MUONGO NO FUPI SANA.
Yes, when banks compete, borrowers always win. There are over 12K lenders in the US market with a population of 350 million. I think Kenya has less than 100, with about five controlling the lion's share, both digital and traditional, in a population of 50 million. That is oppression/monopoly. Down the road, EA lenders and international lenders need to be allowed to compete in Kenya and the EA market until saturation is reached. That is when credit cards hit the markets. Inundating credit/liquidity is the king of economic growth.
The government needs sensible regulations and effective financial risk management from the private sector. Proper financial risk management, which I think the new administration will usher- in credit bureau tweaking, should reward Sensible borrowers and punish defaulters hard. Someone with excellent credit ought to borrow and enjoy near-zero interest. Once that area is affected, and there is stiff competition, lenders will likely offer months to years of free introductory rates or no interest for long periods. That puts money back to good borrowers, who will, in turn, keep borrowing and expanding their hustles, especially those borrowing 200K and up. With a 740+ credit score in the US, you can go for decades without paying interest on credit cards by taking advantage of 2 years of 0-interest introductory rates. After 2-3 years, shelf the card, use 10% of credit and migrate to another card. After a few years, you will probably be sitting on $500K-1000,000 credit, which will start talking to you at night. Many ideas, some illegal, will be running through your mind, like, for instance, should I spend the whole thing and begin again after seven years?
Topic: Safaricom, NCBA and KCB presser tomorrow (Read 2828 times)