Thread by @pesa_africa

Interesting chart

Thing is, Banks artificially suppressed loan approvals after interest rate cap law in Aug 2016 only to come back 2 years later and pull out this data as proof that interest rate caps are bad for the economy 1/

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Im not in favor of interest rate caps. I believe lending rates should be left to the market.

But i am in favor of increasing lending alternatives in the market to lower the cost of borrowing via competition 2/

So how do we minimize bank monopoly ?

1. Find new avenues of lending capital, stimulate existing ones - offshore, crypto, chamas/group savings crowdfunding, p2p, Fintechs

Lending capital from other sources besides banks lowers their influence, add more alternatives

2. Go after Pockets of borrowers where banks have failed

Biashara, informal sector, savings groups, what else?

I think its pointless competing with banks using same data they have access to.

You have to uncover something they dont have

If you can lend to a Kenyan Chama at less than 18% p.a they'll love you for it

If you dont know what/how much is flowing through the informal economy, how can you lend to it?

Kenya 60%+ informal biashara

I predict all current Fintech lending firms in Kenya will eventually hit a plateau, where the economy cant absorb any more consumer loans and its all a matter of musical chairs as borrowers take off loans from one lender to pay off another

and the keyword unroll