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Mobile Loans Ponzi
Rank: New-farer Joined: 11/28/2018 Posts: 42 Location: Nairobi
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@kawi254 just to clarify.
The borrower does not provide or list referees, they give the loan app permissions to read phone sms and contacts.
When installing the loan app, the user has to allow these permissions. Thats how they got your contacts.
Ni sumbua sana. And embarrassing.
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Rank: Member Joined: 5/6/2008 Posts: 199
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Rank: Member Joined: 2/20/2007 Posts: 767
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Great paper. Now we know that as of 2017, 70% of digital loans were for other reasons other than business. We also know that 50% either paid late or defaulted. May not be a very lucrative sector for banks. Supports the figures from CBA whereby despite having 40m accounts and mshwari being the leading digital lender, its assets and profits are not much better than poor small SME bank NIC. All the more why CBK needs to disclose figures that banks are lending on mobile and default rates for banks specifically. I am surprised that in 2017 only 3% of digital loans went to gambling. However this was a respondents survey and sometimes people dont tell the truth about stuff. I wish a similar survey could be done using hard core data from CBK and CCK and mobile phone companies. They must find it difficult....... those who have taken authority as the truth, rather than truth as the authority. -G. Massey.
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Rank: Member Joined: 4/26/2011 Posts: 759
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I think this is a brilliant idea, but you need house money to back the platform otherwise it is a Ponzi scheme. If any founder of one of the platform is interested in selling equity of the platform to raise house money then I am interested
The idea is actually transformational if you have the right vision and the right management who understand how to build a business and not a technology that is meant to steal for people/Ponzi scheme.
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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Welcome back Rollout!! You vanished after that Kikuyu woman  "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Member Joined: 4/26/2011 Posts: 759
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murchr wrote:Welcome back Rollout!! You vanished after that Kikuyu woman Man, she clued me to the couch!
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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Rank: Member Joined: 4/26/2011 Posts: 759
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is Pesesha still working?
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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Rollout wrote:is Pesesha still working? That name has been floated around https://pezesha.com/ "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Member Joined: 4/26/2011 Posts: 759
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murchr wrote:[quote=Rollout]is Pesesha still working? That name has been floated around https://pezesha.com/[/quote] The picture alone tells me its a Mzungu who owns it
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Rank: Elder Joined: 12/7/2012 Posts: 11,908
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https://www.businessdail...3180-15sjkyh/index.html
MPs direct CBK to control digital lenders loan rates Parliament has asked the Central Bank of Kenya to publish regulations that will see interest rates charged by more than 500 unregulated digital microlenders controlled by the banking watchdog. National Assembly’s Information, Communications and Technology (ICT) committee also wants the banking regulator to ensure the digital lenders are guided by the interest caps introduced in 2016. The current status of the sector allows the microlenders to skirt a government cap on interest of four points above the central bank’s benchmark interest rate, which now stands at nine percent—capping loan rates at 14 percent. “The interest rates should be those applicable to commercial banks for standardisation,” the committee said in a report tabled in Parliament. The proliferation of the lenders using the mobile money technology to extend credit to the banked and unbanked alike, has saddled borrowers with high interest rates. Their entry was in response to a rise in demand for quick loans and the freeze in commercial bank lending to individuals and small business that followed the 2016 capping of interest rates. The lenders, who are charging borrowers annualised interest of between 18 per cent and 200 percent, have tapped into a market that has become more lucrative than mainstream banking where lending rates are capped by law at 13 per cent. Seasoned players The list of seasoned players in this market includes Letshengo, Tala, Izwe and Branch, while new market entrants include digital lending platforms such as Nairobi Securities Exchange-listed firm Car & General. The microlenders mostly offer borrowers short-term loans, lasting days to one month, according to a survey by research firm Financial Sector Deepening (FSD). Others borrow to bet, pay school fees and settle other loans. Borrowers, most of whom are unable to access loans from mainstream banks, are attracted to the microlenders who demand relatively less documentation and are quick to disburse the cash. The FSD study however found that besides the high interest rates, the micro-lending space is plagued by lack of transparency. Borrowers, for instance, reported that they were charged fees they did not expect while others did not fully understand the costs or fees associated with loan. The high interest rates are partly seen as a means of mitigating the impact of defaults since the firms lend to some of the riskiest individuals and businesses. The top reasons cited for default include poor business performance, job loss, lack of planning and lack of surplus income to repay the loans. China last year stopped microlenders in that market from issuing loans to borrowers with no source of income, with the firms also banned from misleading consumers into over-borrowing. In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Elder Joined: 12/4/2009 Posts: 10,678 Location: NAIROBI
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Angelica _ann wrote:https://www.businessdailyafrica.com/economy/MPs-direct-CBK-to-control-digital-lenders-loan-rates-/3946234-5013180-15sjkyh/index.html
MPs direct CBK to control digital lenders loan rates
Parliament has asked the Central Bank of Kenya to publish regulations that will see interest rates charged by more than 500 unregulated digital microlenders controlled by the banking watchdog.
National Assembly’s Information, Communications and Technology (ICT) committee also wants the banking regulator to ensure the digital lenders are guided by the interest caps introduced in 2016.
The current status of the sector allows the microlenders to skirt a government cap on interest of four points above the central bank’s benchmark interest rate, which now stands at nine percent—capping loan rates at 14 percent.
“The interest rates should be those applicable to commercial banks for standardisation,” the committee said in a report tabled in Parliament.
The proliferation of the lenders using the mobile money technology to extend credit to the banked and unbanked alike, has saddled borrowers with high interest rates.
Their entry was in response to a rise in demand for quick loans and the freeze in commercial bank lending to individuals and small business that followed the 2016 capping of interest rates.
The lenders, who are charging borrowers annualised interest of between 18 per cent and 200 percent, have tapped into a market that has become more lucrative than mainstream banking where lending rates are capped by law at 13 per cent.
Seasoned players
The list of seasoned players in this market includes Letshengo, Tala, Izwe and Branch, while new market entrants include digital lending platforms such as Nairobi Securities Exchange-listed firm Car & General.
The microlenders mostly offer borrowers short-term loans, lasting days to one month, according to a survey by research firm Financial Sector Deepening (FSD).
Others borrow to bet, pay school fees and settle other loans.
Borrowers, most of whom are unable to access loans from mainstream banks, are attracted to the microlenders who demand relatively less documentation and are quick to disburse the cash.
The FSD study however found that besides the high interest rates, the micro-lending space is plagued by lack of transparency.
Borrowers, for instance, reported that they were charged fees they did not expect while others did not fully understand the costs or fees associated with loan.
The high interest rates are partly seen as a means of mitigating the impact of defaults since the firms lend to some of the riskiest individuals and businesses.
The top reasons cited for default include poor business performance, job loss, lack of planning and lack of surplus income to repay the loans.
China last year stopped microlenders in that market from issuing loans to borrowers with no source of income, with the firms also banned from misleading consumers into over-borrowing. MPs have being borrowing heavily from the micro-lenders. Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 3/19/2010 Posts: 3,504 Location: Uganda
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I support interest rate capping but not in this sector. the risks are immense.they can leave this one for hustlers. you find cheeky young men registering with their grandma's ID and taking mobile loans. how far will you get with crb listing of a 85yr old grandma? such risks can only be compensated with a higher return.otherwise we shall see a near instant death of this finance subsector if capping is implemented punda amecheka
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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newfarer wrote:I support interest rate capping but not in this sector. the risks are immense.they can leave this one for hustlers.
you find cheeky young men registering with their grandma's ID and taking mobile loans. how far will you get with crb listing of a 85yr old grandma? How has interest rate capping helped this economy. Look at the business env since 2014. "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Elder Joined: 3/19/2010 Posts: 3,504 Location: Uganda
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murchr wrote:newfarer wrote:I support interest rate capping but not in this sector. the risks are immense.they can leave this one for hustlers.
you find cheeky young men registering with their grandma's ID and taking mobile loans. how far will you get with crb listing of a 85yr old grandma? How has interest rate capping helped this economy. Look at the business env since 2014. I take a personal narrow view on this.it has helped me .I have accessed cheap loans and built myself to my satisfaction by the grace of God punda amecheka
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Rank: New-farer Joined: 10/29/2018 Posts: 14 Location: Nairobi
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newfarer wrote:I support interest rate capping but not in this sector. the risks are immense.they can leave this one for hustlers.
you find cheeky young men registering with their grandma's ID and taking mobile loans. how far will you get with crb listing of a 85yr old grandma?
such risks can only be compensated with a higher return.otherwise we shall see a near instant death of this finance subsector if capping is implemented Agreed, a rate cap in this sector will most likely lead to lenders exiting the sector and see a return of the old school Shylocks. With loan defaults of over 15%(due to grandma's IDs...), charging 14% interest is impractical, also considering that micro-lenders have to source funds privately unlike banks who get 'free' funds from depositors, the risk is not worth it. Our clever lawmakers & government assume everything can be fixed with simplistic regulations, we should first find out why borrowers are leaving banks for micro-lenders before shutting the sector down
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Rank: Member Joined: 2/20/2007 Posts: 767
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Angelica _ann wrote:https://www.businessdailyafrica.com/economy/MPs-direct-CBK-to-control-digital-lenders-loan-rates-/3946234-5013180-15sjkyh/index.html
MPs direct CBK to control digital lenders loan rates
Parliament has asked the Central Bank of Kenya to publish regulations that will see interest rates charged by more than 500 unregulated digital microlenders controlled by the banking watchdog.
National Assembly’s Information, Communications and Technology (ICT) committee also wants the banking regulator to ensure the digital lenders are guided by the interest caps introduced in 2016.
The current status of the sector allows the microlenders to skirt a government cap on interest of four points above the central bank’s benchmark interest rate, which now stands at nine percent—capping loan rates at 14 percent.
“The interest rates should be those applicable to commercial banks for standardisation,” the committee said in a report tabled in Parliament.
The proliferation of the lenders using the mobile money technology to extend credit to the banked and unbanked alike, has saddled borrowers with high interest rates.
Their entry was in response to a rise in demand for quick loans and the freeze in commercial bank lending to individuals and small business that followed the 2016 capping of interest rates.
The lenders, who are charging borrowers annualised interest of between 18 per cent and 200 percent, have tapped into a market that has become more lucrative than mainstream banking where lending rates are capped by law at 13 per cent.
Seasoned players
The list of seasoned players in this market includes Letshengo, Tala, Izwe and Branch, while new market entrants include digital lending platforms such as Nairobi Securities Exchange-listed firm Car & General.
The microlenders mostly offer borrowers short-term loans, lasting days to one month, according to a survey by research firm Financial Sector Deepening (FSD).
Others borrow to bet, pay school fees and settle other loans.
Borrowers, most of whom are unable to access loans from mainstream banks, are attracted to the microlenders who demand relatively less documentation and are quick to disburse the cash.
The FSD study however found that besides the high interest rates, the micro-lending space is plagued by lack of transparency.
Borrowers, for instance, reported that they were charged fees they did not expect while others did not fully understand the costs or fees associated with loan.
The high interest rates are partly seen as a means of mitigating the impact of defaults since the firms lend to some of the riskiest individuals and businesses.
The top reasons cited for default include poor business performance, job loss, lack of planning and lack of surplus income to repay the loans.
China last year stopped microlenders in that market from issuing loans to borrowers with no source of income, with the firms also banned from misleading consumers into over-borrowing. Great idea. At least someone is thinking in the right way. They must find it difficult....... those who have taken authority as the truth, rather than truth as the authority. -G. Massey.
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Rank: Elder Joined: 7/22/2009 Posts: 7,452
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Jimmii wrote:newfarer wrote:I support interest rate capping but not in this sector. the risks are immense.they can leave this one for hustlers.
you find cheeky young men registering with their grandma's ID and taking mobile loans. how far will you get with crb listing of a 85yr old grandma?
such risks can only be compensated with a higher return.otherwise we shall see a near instant death of this finance subsector if capping is implemented Agreed, a rate cap in this sector will most likely lead to lenders exiting the sector and see a return of the old school Shylocks. With loan defaults of over 15%(due to grandma's IDs...), charging 14% interest is impractical, also considering that micro-lenders have to source funds privately unlike banks who get 'free' funds from depositors, the risk is not worth it. Our clever lawmakers & government assume everything can be fixed with simplistic regulations, we should first find out why borrowers are leaving banks for micro-lenders before shutting the sector down Kenyan MPigs are not very smart. In fact, they are not smart at all!!! No one is going to give you a mobile loan at 13% p.a. Approx 1% per month!!! Not even your grandmother. She would rather give you the money interest free!!! They will just kill the subsector and f@€k up everyone who depends on it - whether they use it for business or betting!! These are the same fellows who cannot get loans from a bank under the current intereste rate control regime!! So what next??? Old school Shylocks who will take everything you own and still break your legs if you fail to pay! Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Member Joined: 1/1/2011 Posts: 396
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MaichBlack wrote:Jimmii wrote:newfarer wrote:I support interest rate capping but not in this sector. the risks are immense.they can leave this one for hustlers.
you find cheeky young men registering with their grandma's ID and taking mobile loans. how far will you get with crb listing of a 85yr old grandma?
such risks can only be compensated with a higher return.otherwise we shall see a near instant death of this finance subsector if capping is implemented Agreed, a rate cap in this sector will most likely lead to lenders exiting the sector and see a return of the old school Shylocks. With loan defaults of over 15%(due to grandma's IDs...), charging 14% interest is impractical, also considering that micro-lenders have to source funds privately unlike banks who get 'free' funds from depositors, the risk is not worth it. Our clever lawmakers & government assume everything can be fixed with simplistic regulations, we should first find out why borrowers are leaving banks for micro-lenders before shutting the sector down Kenyan MPigs are not very smart. In fact, they are not smart at all!!! No one is going to give you a mobile loan at 13% p.a. Approx 1% per month!!! Not even your grandmother. She would rather give you the money interest free!!! They will just kill the subsector and f@€k up everyone who depends on it - whether they use it for business or betting!! These are the same fellows who cannot get loans from a bank under the current intereste rate control regime!! So what next??? Old school Shylocks who will take everything you own and still break your legs if you fail to pay! ...the rate controls have to go. No way around it. CBK can only regulate deposit taking institutions.
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Rank: New-farer Joined: 10/29/2018 Posts: 14 Location: Nairobi
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In Tana river, the government loaned out Sh. 61 Million at 0%/very low interest rate 5 years ago, nobody has repaid to date. The private sector gives loans at different terms and they are repaid, but now the government wants to push everyone to doing what it proved can't work😅 UNRELATED observation, the government has become desperate and assumes everything will be fixed if it uses it's muscles and bullies everyone via regulations, it now wants to fix PSV fares - I agree the PSVs misbehave... I'm assuming this will also cover Uber too so remove surge pricing. Yet the more solid solutions like a light Train system, trams and BRT are ignored because our government likes forcing it's responsibilities to it's citizens & then steps in to regulate them. In Kenya, the private sector does all the main government roles: Education(private schools vs public...) Security(now wants to give guns to private guards as cops..., so pay a private guard, build a huge wall on property...), Healthcare(private hospitals are the only hope), Transport(use psvs & buy a tough suv), Water & Sewerage(need boreholes even in Nairobi), Agriculture (force farmers to sell at a loss) and many others. https://www.nation.co.ke...2178-10bk43az/index.html
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