CBK compares mobile lenders with shylocks

[Nefertiti]

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Pundit - come here. I told you the mega billions minted by Fuliza & M-Shwari thieves is not indicative of growth. Cause at 90% interest - it basically daylight robbery.

CBK calls for regulation of mobile-based lenders

https://citizentv.co.ke/business/cbk-calls-for-regulation-of-mobile-based-lenders-250091/

[vooke]

https://journals.sagepub.com/doi/full/10.1177/0018726716640865

[Kadudu]

Those are legal shylocks. Seems like the government will not take any steps to contain these mobile lenders who are fleecing the public. Most likely CBA is a major player in this field.

[hk]

The same CBK is also hawking stawi mobile loans that have annual interest rates of above 30%. The only reason why this shylock loans are popular is cause treasury is overborrowing locally, crowding out the private sector. Njoroge should be working on lowering CBR rate. Even the much vaunted FDI majority of it is going to this shylocks Tala and branch. 

[bryan275]

They are...

[RV Pundit]

We put interest cap.You  complain.We allow market forces...you also complain.What do you want

[Nefertiti]

We put interest cap.You  complain.We allow market forces...you also complain.What do you want

Interest cap needs to be applied to mobile lenders - never has been - hence the magic profits. And GoK should stick to Exim, WB or Euro burgerbonds.

[RV Pundit]

We put interest cap.You  complain.We allow market forces...you also complain.What do you want

Interest cap needs to be applied to mobile lenders - never has been - hence the magic profits. And GoK should stick to Exim, WB or Euro burgerbonds.

Riskiest unsecured loans to the poorest if capped will not fly.Whyvare so concerned about them anyway....you think they don't know.. better

[hk]

Solution is scrapping of interest rates spread for all loans. Mobile loans exploded after capping of bank interest rates. Banks offering mobile loans are charging atleast half what the pure mobile lenders are charging (except CBA). KCB via Mpesa is charging 4% per month or 48% annual compared to tala and branch 11% per mon or 132% annual. Scrapping of interest rates will also lead to rising tbills rates which means government would have to start competing with private sector for debt. This would curtail government borrowing locally that eventually would rectify kenya fiscal stability.

[Nefertiti]

We put interest cap.You  complain.We allow market forces...you also complain.What do you want

Interest cap needs to be applied to mobile lenders - never has been - hence the magic profits. And GoK should stick to Exim, WB or Euro burgerbonds.

Riskiest unsecured loans to the poorest if capped will not fly.Whyvare so concerned about them anyway....you think they don't know.. better

For the same reason we don't allow kumi kumi or wanton gambling - predatory credit has negative effects on society. No, they don't know better, is that a question? But my main point in this - to show how mega profits in the financial sector are not indicative of growth. Cause it's mostly theft. If these were standard loans to SMEs - it would be a very strong growth indicator - with services, jobs, taxes, supply chains, etc. But this Fuliza corruption does not indicate growth but inequality.

[Kadudu]

That is very arrogant of you. You have no empathy for the majority poor masses of Kenya. It is the role of the government to protect all its citizens irrespective of status from any illegal or semi-legal predators. The government has the duty in this case to control the interest rates the mobile lenders are demanding from the many clueless customers. In the end all will loose as the loans will not be repaid. Demanding up to 30% interest rates per month is unethical and also illegal under current laws.
Problem here is our leaders have direct interests in these mobile lendors or are paid to keep quiet.

author=RV Pundit link=topic=7548.msg63036#msg63036 date=1559722721]
Riskiest unsecured loans to the poorest if capped will not fly.Whyvare so concerned about them anyway....you think they don't know.. better

[RV Pundit]

We are looping..we cap bank loans you complain.I think way forward is to form a regulatory body to deal with this new sector.CBK is not ready to regulate non bank actors.SASRA deal with Sacco's.Nobody regulate microfinance and now micro mobile lenders.The board will study the sector, hear out why they are charging high interest and settle on a regulatory framework.In the meantime don't kill the sector together with mobile betting..start taxing it and let it grow so we can regulate.kenya took faith in mpesa and it's grown beyond our wildest dreams...

[Nefertiti]

Ati M-Pesa what? Lol, wish you could muster a new analogy. These are THIEVES - not "investors" any more than betting or drug dealing. Poor peasants and jobless youth will take any super-costly money - just like folks abuse drugs. The sector should be capped. No, it's not a sector worth nurturing, it's a heist on the gullible and the vulnerable. Pyramid ama shylock - that's the right analogy. Why don't we nurture the traditional shylock "sector"? - cause the pig now has M-Pesa makeup?? Every vulture is circling for the kill and it's GoK's job to protect the vulnerable.

We are looping..we cap bank loans you complain.I think way forward is to form a regulatory body to deal with this new sector.CBK is not ready to regulate non bank actors.SASRA deal with Sacco's.Nobody regulate microfinance and now micro mobile lenders.The board will study the sector, hear out why they are charging high interest and settle on a regulatory framework.In the meantime don't kill the sector together with mobile betting..start taxing it and let it grow so we can regulate.kenya took faith in mpesa and it's grown beyond our wildest dreams...

[RV Pundit]

Robina...these micro loans are helping figh poverty...you know poor family everytime they get a shock...like a sick relative...or jailed one....they sell their only cow or even land.. and go deeper into poverty...now they fuliza or mswhari.Besides you're too late ..we are talking entrenched billion dollars industry that is the future.Poor people are not stupid.We need empirical study here...not kneejerk let's protect the poor.We already know Mpesa lifts 2% out of povery according to some MIT study....that is just remittance from turkana in Nairobi to his mother at time of needs.These loans may even do more...so we need research to compare say Uganda poor without mobile lending and Kenya...follows those families for maybe 3yrs and come up with conclusions and recommendations..based on scientific evidence driven process...not tialalas..and tibiims that nobody even know what they means.

[Nefertiti]

First, am glad to observe your worship of Ruto is lessening by the day.. as I upgrade your thinking about his incompetence.

Now equally dop your worship of M-Pesa as some miraculous invention. It's a mere app whose growth is one-dimensional. It has big potential but bimbos like Bob Collymore hawawezi. I told you just download Alipay uone some good stuff. M-Pesa badly needs new innovation. Sio huu upuzi wa shylock. When the biggest company in the region starts squeezing every penny using semi-legal loopholes - signs of a dinosaur.

About remittances to the starving - ama impromptu harambee - all you need is M-Pesa not Fuliza. Don't conflate. And banks have existed for centuries yet we capped them, sembuse mobile loans? Just a new regulation from CBK - or an Act of Parliament if need be. There is nothing special - nor even good nor innovative - about M-Shwari or Fuliza. These are new pyramids and shylocks - damn pigs in heavy makeup. Afadhali ile kiwi ya Babu.

By the way, generally poor people are stupid. True story. We can debate it if you prefer.

Robina...these micro loans are helping figh poverty...you know poor family everytime they get a shock...like a sick relative...or jailed one....they sell their only cow or even land.. and go deeper into poverty...now they fuliza or mswhari.Besides you're too late ..we are talking entrenched billion dollars industry that is the future.Poor people are not stupid.We need empirical study here...not kneejerk let's protect the poor.We already know Mpesa lifts 2% out of povery according to some MIT study....that is just remittance from turkana in Nairobi to his mother at time of needs.These loans may even do more...so we need research to compare say Uganda poor without mobile lending and Kenya...follows those families for maybe 3yrs and come up with conclusions and recommendations..based on scientific evidence driven process...not tialalas..and tibiims that nobody even know what they means.

[hk]

There's no question  the so called finech are predatory mobile money lenders. Kenya has to start with scrapping of interest rate caps , clearly it has had  opposite of its intended effect https://www.imf.org/en/Publications/WP/Issues/2019/05/31/Do-Interest-Rate-Controls-Work-Evidence-from-Kenya-46877 . Scrapping interest rates caps will go along way to reducing demand for shylock loans.

[Nefertiti]

There's no question  the so called finech are predatory mobile money lenders. Kenya has to start with scrapping of interest rate caps , clearly it has had  opposite of its intended effect https://www.imf.org/en/Publications/WP/Issues/2019/05/31/Do-Interest-Rate-Controls-Work-Evidence-from-Kenya-46877 . Scrapping interest rates caps will go along way to reducing demand for shylock loans.

Pundit thinks shark fintech is a new innovative sector. Perhaps Ruto would make him fintech CS - the new department he proposes.

[RV Pundit]

Robina you must be crazy if you think you can sway me with emotional rants.Mobile lending and saving are here to stay for the serve an unmet needs.If you love the poor, start your own app and lend it at zero %.These loans are replacing friends,relatives and Dukas as source of credit for poor Kenyans.They are also smoothing the poor finance and taking away financial shocks.Some people are using it for savings.This is just one sector on top of world acknowledged innovation mpesa.

[Nefertiti]

I think M-Pesa is the only innovation you know. What is the default rate of this great new model? 60%? Why is CBK - the finance sector cop - edging towards capping them, calling them shylocks? Swala nyeti hilo. A quick Google shows 10 critiques for each applause of these "innovations". I'm sure mobile loans and many other good, bad or ugly things are here to stay, that does not vindicate them.

[Georgesoros]

Who uses most of these loans?
Middle class - to pay school fees, fix a car, pay other bills, etc...
Those who dont want rates capped have a an interest. They make money, but we are looking for a financial meltdown 20yrs down.