tech-enabled lending in africa - amazon s3
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FSD Kenya | Creating Value through financial inclusion
Tech-enabled lending in Africa
Presentation & panel discussion
4th Regional Credit Information Sharing ConferenceSystemization of Fintech Disruption in AfricaFostering market conduct & sustainability in digital lending
28 August 2018, Kenya School of Monetary Studies
Name Title Here
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FSD Kenya: Our goal
Growth Resilience Well-being
Sustainable improvements in the lives of lower income people
in Kenya by creating value through financial inclusion
FSD Kenya | Creating value through financial inclusion3
Digital credit has experienced explosive growth in Kenya & Tanzania
(forthcoming paper from CGAP & FSD Kenya By Dr. Edoardo Totolo & Michelle Kaffenberger)
FSD Kenya.
FSD Kenya | Creating value through financial inclusion4
When you search for “Kenya loans”…
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21%
10%8%
6%
0.1% 0.1%
35%
29%
12%
4%1.8% 1.3%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Any digitallender
M-Pawa Timiza Nivushe Branch Tala Any digitallender
M-Shwari KCB M-Pesa
EquityEazzy
Tala MCo-opCash
Tanzania Kenya
Share of mobile phone owners who have
borrowed from each lender (top 5)
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Uses of digital credit37%
36%
31%
22%
14%13%
9%8%
7%
1%
35%
15%
37%
10% 10%
5%7%
20%
17%
3%
0%
5%
10%
15%
20%
25%
30%
35%
40%
For meetingday-to-dayordinary
householdneeds
To purchaseairtime
For businesspurposes suchas investment
or payroll
For personalhousehold
goods
To pay a bill Just to try itout
For medicalneeds,
includingmedical
emergencies
To pay schoolor universityexpenses
Other For betting
Tanzania Kenya
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Mobile betting: correlation or causation?
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Borrowers reporting late repayment or
default of digital loan
56%
31%
47%
12%
0%
10%
20%
30%
40%
50%
60%
Repaid a loan late Defaulted on a loan
Tanzania Kenya
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Actions taken to repay loans
9%
4%
1%1% 0%
20%
16%
6%5%
4%
0%
5%
10%
15%
20%
25%
Reduced foodpurchases
Borrowed moneyto repay the loan
Skipped payingschool fees
Sold assets orbelongings
Forwent medicaltreatment
Tanzania Kenya
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Digital borrowers who reported each
issue
27%
16%
12%9%
19%
12%
4%
8%
0%
5%
10%
15%
20%
25%
30%
Total giving at least oneof these answers
I was charged fees Ididn't expect
The lender unexpectedlywithdrew my money
I did not fully understandthe costs or fees
Tanzania Kenya
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Digital borrowers reasons for contacting
customer care
11% 12%
20% 20%
23%
13%
4%
20%
5%7%
0%
5%
10%
15%
20%
25%
To request ahigher loan limit
A question aboutthe fee or interest
rate
A question aboutthe amount I
qualify for
To report orcomplain about an
unexpectedcharge or fee
To complain aboutmy information inthe credit bureau
Tanzania Kenya
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Total # of loan sources (digital & non)
currently used by digital borrowers
31%
44%
18%
6%
2% 0% 0% 1%
31%
36%
20%
8%
3%1% 0% 0%
0%
10%
20%
30%
40%
50%
0 1 2 3 4 5 6 7Tanzania Kenya
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Share of digital borrowers with current
loan from each source
13%
9%
5%
1%2% 2%
1%
17%
9% 9%7%
4%
2% 1%
0%
5%
10%
15%
20%
A familymember,
friend,neighbor
Savingsgroup/
VICOBA
Bank SACCO Microfinance Employer An informalmoneylender
Tanzania Kenya
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#01
Phasellus id ligula ut enimelementum bibendum eget eget
magna.
Topic #3
Meet the Panel
Dan Karuga Rose Muturi Kevin Mutiso Michael Kimani
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Questions for discussion:
1. How might we be disruptive in
customer engagement to develop customer-centric business models?
2. How can risk-based credit pricing
come out of fit for purpose credit
models built here?
3. How can logical transparency be
enhanced on everything from terms
& conditions to scoring?
4. How can digital credit be
underpinned by a culture of
integrity?
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FSD Kenya | Creating Value through financial inclusion
Contact Us
3rd Floor, 9-Riverside, Riverside Drive
P.O. Box 11353, 00100 Nairobi, Kenya|
Telephone: +254 20 513 7300
Website: www.fsdkenya.org |
Creating value through financial inclusion
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Use of digital savings among digital
borrowers
43% 43%
14%
46%
35%
18%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Currently saves digitally Had digital savings in the past Never saved digitally
Tanzania Kenya
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Self-reported reasons for saving among
digital borrowers
18%
4%
14%
21%
11%
8%
1%
0%
17%
12%
32%
20%
15%
14%
12%
11%
8%
8%
5%
4%
0% 5% 10% 15% 20% 25% 30% 35%
For business purposes, such as investment or payroll
For personal things (clothes, shoes, travel)
In order to increase the loan amount, you qualify for
For meeting day-to-day ordinary household needs (e.g. food, transportation)
In order to access a loan
For medical needs, including medical emergency
To pay a utility bill, such as electricity or water
To purchase airtime
To pay school or university fees or other school costs such as uniforms orbooks
For other emergencies such as fire, flood
Tanzania Kenya