Tech-enabled lending in Africa

Transcription

1 Tech-enabled lending in Africa Presentation & panel discussion 1 4 th Regional Credit Information Sharing Conference Systemization of Fintech Disruption in Africa Name Title Here Fostering market conduct & sustainability in digital lending 28 August 2018, Kenya School of Monetary Studies FSD Kenya Creating Value through financial inclusion

2 FSD Kenya: Our goal Sustainable improvements in the lives of lower income people in Kenya by creating value through financial inclusion Growth Resilience Well-being 2

3 FSD Kenya. Digital credit has experienced explosive growth in Kenya & Tanzania (forthcoming paper from CGAP & FSD Kenya By Dr. Edoardo Totolo & Michelle Kaffenberger) 3 FSD Kenya Creating value through financial inclusion

4 When you search for Kenya loans 4 FSD Kenya Creating value through financial inclusion

5 Share of mobile phone owners who have borrowed from each lender (top 5) % 2 21% Any digital lender 1 8% 6% 0.1% 0.1% M-Pawa Timiza Nivushe Branch Tala Any digital lender 12% M-Shwari KCB M- Pesa 4% Equity Eazzy 1.8% 1.3% Tala MCo-op Cash Tanzania Kenya

6 Uses of digital credit % 3 36% 37% 3 31% % 14% 13% 17% 6 1 For meeting day-to-day ordinary household needs To purchase airtime For business purposes such as investment or payroll 1 1 For personal household goods To pay a bill Tanzania Just to try it out Kenya 9% 7% For medical needs, including medical emergencies 8% To pay school or university expenses 7% Other 1% 3% For betting

7 Mobile betting: correlation or causation? 7

8 Borrowers reporting late repayment or default of digital loan 6 56% Tanzania Kenya 5 47% % % Repaid a loan late Defaulted on a loan

9 Actions taken to repay loans Tanzania Kenya % 1 9% 9 4% 6% 4% 1% 1% Reduced food Borrowed money Skipped paying Sold assets or Forwent medical purchases to repay the loan school fees belongings treatment

10 Digital borrowers who reported each issue Tanzania Kenya 3 27% 2 19% 16% 1 12% 12% 1 9% 8% 10 4% Total giving at least one I was charged fees I The lender unexpectedly I did not fully understand of these answers didn't expect withdrew my money the costs or fees

11 Digital borrowers reasons for contacting customer care 2 Tanzania Kenya 23% % 11% 12% 4% 7% 11 To request a higher loan limit A question about the fee or interest rate A question about the amount I qualify for To report or complain about an unexpected charge or fee To complain about my information in the credit bureau

12 Total # of loan sources (digital & non) currently used by digital borrowers % 31% 44% 36% 18% % 8% 3% 2% 1% 1% Tanzania Kenya

13 Share of digital borrowers with current loan from each source 1 13% 17% 1 9% 9% 9% 7% 13 A family member, friend, neighbor Savings group/ VICOBA 4% 1% 2% 2% 2% 1% 1% Bank SACCO Microfinance Employer An informal moneylender Tanzania Kenya

14 Meet the Panel #01 Phasellus id ligula ut enim elementum bibendum eget eget magna. 14 Topic #3 Dan Karuga Rose Muturi Kevin Mutiso Michael Kimani

15 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 15 enhanced on everything from terms & conditions to scoring? 4. How can digital credit be underpinned by a culture of integrity?

16 Creating value 16 Contact Us 3 rd Floor, 9-Riverside, Riverside Drive P.O. Box 11353, Nairobi, Kenya Telephone: Website: through financial inclusion FSD Kenya Creating Value through financial inclusion

17 Use of digital savings among digital borrowers % 43% 43% 3 18% 14% Currently saves digitally Had digital savings in the past Never saved digitally Tanzania Kenya

18 Self-reported reasons for saving among digital borrowers Tanzania For other emergencies such as fire, flood Kenya 4% 12% To pay school or university fees or other school costs such as uniforms or books 17% To purchase airtime To pay a utility bill, such as electricity or water 1% 8% 8% For medical needs, including medical emergency 8% 11% 18 In order to access a loan For meeting day-to-day ordinary household needs (e.g. food, transportation) 12% 11% 14% 21% In order to increase the loan amount, you qualify for 1 14% For personal things (clothes, shoes, travel) 4% For business purposes, such as investment or payroll 18% 32%