Kenya is ground zero for 'fintech', with dozens of apps mining customer data and pushing debt to Kenyans in need of short-term liquidity.
In a recent @BostonReview piece, @EmmaFlemingPark and I analyze the issue: bostonreview.net/class-inequali…
In a recent @BostonReview piece, @EmmaFlemingPark and I analyze the issue: bostonreview.net/class-inequali…
Much of this is valorized as financial inclusion, but whatever merits may exist in digital lending, it's clear to many that the situation in Kenya has become a crisis.
At the center of things is Safaricom, whose dominant market position and political influence gives it outsized access to personal data and limited regulatory oversight.
But Silicon Valley is getting in on the action, with fintech firms charging fees that -- were they offered by a bank -- would contravene Kenya's laws on interest rates.
The explosion of short-term, expensive debt is occurring amidst a general economic slowdown that #KOT know well.
Digital debt is a way for firms to capitalize on what we call the 'zero balance economy,' where routine volatility & income uncertainty force Kenyans to borrow.
Digital debt is a way for firms to capitalize on what we call the 'zero balance economy,' where routine volatility & income uncertainty force Kenyans to borrow.
Some proponents of financial inclusion are working to correct the problems -- advocating transparency and consumer protection -- but we fear this is too little. Telcos, banks, and venture capitalists are unlikely to lessen their demand for exorbitant returns.
We have more to say in the full essay: bostonreview.net/class-inequali…
