Thread by @CodaStory

Digital micro-loan apps are huge in Kenya. You log in with Facebook, hand over a few details, and get quick cash within moments. Sounds ideal, right?

Our reporter @KerenWeitzberg dug deeper into privacy issues, debt, and how the President profits.
codastory.com/authoritarian-…

Today, there are around 50 mobile lending apps in Kenya, and dozens more in neighboring African countries. Philanthropists, such as Melinda Gates, say microloans transform the lives of people who otherwise wouldn’t be able to access them.

So far, so good.

About 1 in 3 Kenyans use digital lending. It’s quick, easy, and requires no face-to-face contact.

Radio, SMS and online adverts sing the praises of digital loans: “Watch your money grow,” they promise. “It’s tempting. They sweet talk you,” says one of our sources.

But many of the apps collect large amounts of personal data. Everything from GPS locations, to how often people call their parents, to their social media feeds. forbes.com/sites/forbestr…

Watchdog @privacyint says laws requiring citizens to register their SIM cards is creating a “pervasive system of mass surveillance” across Africa. And this helps financial tech companies to monitor and assess the everyday behavior of Kenyans

privacyinternational.org/long-read/3109…

“We use smartphone data to build a financial identity for applicants. Our machine learning algorithms analyze over 2000 data points to make lending decisions,” said former Director of Marketing at @branch_co, Sofia Zab

standardmedia.co.ke/business/artic…

Most users borrow just a few dollars. Despite high interest rates and short payment windows, many Kenyans would rather have access to financial services than none at all.

Since many Kenyans struggle to make ends meet, paying loans back can be a challenge.

Research suggests two thirds of Kenyans are skipping meals to service loans, while many are concerned the apps are fueling an online gambling craze among Kenya’s youth.

Last year, people who missed repayments to the lending app Okash discovered something disturbing.

The company was texting their friends and relatives asking them to “kindly inform” debtors of their loan obligations.

https://twitter.com/Miss_Wamuyu/status/1113037875044630533?s=20

And ironically, Kenyans are now being locked out of financial services after they failed to repay loans of just a few dollars on these apps.

2.7 million Kenyans have been blacklisted by Credit Bureaus in recent years – 400,000 of them for defaulting on loans of less than $2

What’s more, Kenyan president Uhuru Kenyatta partly owns CBA Bank, which runs two of Kenya’s most popular digital lending platforms. So, the government has a direct financial stake in the digital lending industry, and is turning a profit.

We followed up on a group of young Kenyans whose lives have been affected by microloan apps. For the full story of how the Kenyan state is embedded in the digital lending industry, read our investigation here: codastory.com/authoritarian-…

For more reporting on Authoritarian Tech in Kenya, check out @KerenWeitzberg’s piece on how Kenya’s biometric voting system paved the way for invasive and undemocratic methods of data harvesting.
codastory.com/authoritarian-…