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Safaricom PLC's Fuliza Overdraft Dominates Micro Loan Market, Outshining Competitors. Safaricom's innovative Fuliza overdraft service has dramatically transformed the landscape of the micro loan sector, outperforming rival digital credit providers and securing a dominant market position, according to recent findings by the Competition Authority of Kenya (CAK). The regulatory body's in-depth credit market inquiry highlights a significant shift in the industry, with several competitors gradually retreating from the micro loan segment since Fuliza's market entry in January 2019. Fuliza, known for allowing M-Pesa users to complete transactions with insufficient funds, has seen its user base and loan disbursements skyrocket, overshadowing traditional loan services like M-Shwari despite the latter's popularity. Between January 2019 and March 2020, Fuliza's loan disbursements surged by 232%, with the platform witnessing a 213% increase in the total value of loans issued. This explosive growth led to a noticeable decline in both the number and value of loans disbursed by other digital credit providers, though the average size of loans across the sector saw a rise. As of the six months ending September last year, Fuliza's disbursement value climbed by 32.8% to an impressive Sh419.2 billion, with the platform servicing over 7.5 million unique users. This growth came despite a reduction in the average loan size and Safaricom's earnings from the service, following a strategic tariff cut aimed at boosting customer usage. Operated in partnership with NCBA and KCB, Fuliza continues to lead the digital credit market, demonstrating the evolving dynamics of microfinance in Kenya's fast-paced financial landscape. #Fuliza #MicroLoans #DigitalCredit #Safaricom #KenyaFinance #MarketDominance

Protecting Borrowers: Uganda's Landmark Regulation on Digital Lending Penalties The Uganda Microfinance Regulatory Authority (UMRA) introduced groundbreaking guidelines to address the growing concerns around predatory digital lending practices in the country. These new Tier 4 Digital Lending Guidelines aim to safeguard consumers and promote ethical lending behaviors. One of the key provisions or what stood out for me in these guidelines was a cap on the penalties that digital lenders can impose on defaulting borrowers. Specifically, the regulation prohibits lenders from charging penalties that exceed 50% of the total loan principal. This is a significant development, as it prevents digital lenders from exploiting vulnerable borrowers with exorbitant penalty fees. Prior to these guidelines, some digital lending apps were known to charge penalties that far exceeded the original loan amount, leaving borrowers trapped in a cycle of debt. The new regulation addresses this issue head-on, ensuring that the consequences for default remain proportionate and fair. Beyond the penalty cap, the guidelines also tackle other pressing concerns, such as the lack of physical addresses for digital lenders, violations of data privacy, and issues of confidentiality. By addressing these broader challenges, UMRA aims to create a more transparent and accountable digital lending ecosystem in Uganda. The development of these guidelines involved extensive consultations with key stakeholders, including government ministries, regulatory bodies, and the digital lending service providers themselves. This collaborative approach helped to ensure that the regulations strike a balance between consumer protection and the needs of the industry. As digital lending continues to grow in popularity across Africa, Uganda's Tier 4 Digital Lending Guidelines serve as a model for other countries to follow. By prioritizing borrower safeguards and responsible lending practices, these regulations set a precedent for the region and demonstrate a commitment to fostering a more equitable financial landscape. Egesa Ronald Leonard Association of Microfinance Institutions of Uganda Uganda Microfinance Regulatory Authority (UMRA) Bank of Uganda #Digitallending #Responsiblelending #Clientprotection

After all, in fintech Africa, We're all competing with cash! 🇪🇹 🇰🇪 But You, of all people, should not talk about that kind of competition. That is basically the only competition you have. Come to Nigeria, Bwana ! 🤐 I mean you have everything you need to win, and nothing we have seen is beyond what was expected, right? 😜 Orange Airtel Payments Bank You took on the challenge of growing mobile money business to a comparable size to that of Kenya but "Unlike Kenya, Ethiopia's social construct is less geared to town-to-village money transfer which helped you scale faster" 📈 https://lnkd.in/edueeVjM

Rahisi Cloud Banking Loan Management Process: 1. Loan Application Submission: This can be done online through a web interface or a mobile application 2. Initial Verification and Pre-Approval: This step may involve checking credit scores, income verification, and other relevant data. 3. Approval Decision: This decision can be automated based on predefined criteria or may require manual approval from a designated authority 4. Loan Disbursement: The disbursement can be made directly to the borrower's bank account or mobile money 5. Repayment Management: The system manages these repayments, sends reminders, and maintains a record of payment history. Book your free Demo Today: https://lnkd.in/dZjNNcNS Call for more information: +254 706 571 617 #Microfinance #LoanManagement #LoanApproval #LoanDisbursement #LoanRepayment #LoanVerification #LoanApplication #Fintech #MFI #MobileMoney #BankAccount #EmergencyLoan #PersonalLoan #AssetFinance #CheckOffLoan #LogBookLoan #CloudSolution #FreeDemo #CreditScore Civil Servant loans Kenya Kenya Loans & Bank Guarantees Forum MANAGING PROBLEM LOANS, DEBT RECOVERY TECHNIQUES & RESTRUCTURING EXCELLENCE - KENYA FINTECH Circle KUSCCO - Kenya Union of Savings & Credit Co-operatives Ltd. Africa Fintech Network African Women in FinTech & Payments (AWFP) FinTech FinTech

Understanding the Types of Financial Institutions Dear Empowered Reader, As we embark on our exploration of financial service providers, this post will delve into the different categories of financial institutions in Uganda, highlighting their functions and examples. 1. Commercial Banks (Tier I Institutions) Commercial banks are the backbone of Uganda's financial system. They accept deposits, provide loans, and offer various financial services such as foreign exchange and payment processing. Some prominent commercial banks include: Stanbic Bank Uganda dfcu Bank Centenary Bank 2. Credit Institutions (Tier II Institutions) Credit institutions are licensed to accept deposits and provide loans but do not offer checking accounts or foreign exchange services. They play a vital role in extending credit to individuals and businesses. Examples include: OPPORTUNITY BANK UGANDA LTD Guaranty Trust 3. Microfinance Deposit-Taking Institutions (MDIs) (Tier III Institutions) MDIs are crucial for promoting financial inclusion by providing savings and loan products to low-income earners and small businesses. Notable MDIs in Uganda include:BRAC Yako Bank Uganda 4. Non-Deposit Taking Microfinance Institutions (Tier IV Institutions) These institutions offer loans but are not permitted to accept deposits. They often serve specific communities or groups. Examples include: Letshego Uganda Ltd VisionFund Uganda 5. Development Banks Development banks provide long-term financing for projects that promote economic development, focusing on sectors like agriculture and infrastructure. An example is Uganda Development Bank 6. Investment Firms Investment firms facilitate the buying and selling of securities, providing investment opportunities for individuals and institutions. Notable firms include: African Alliance. 7. Insurance Companies Insurance companies provide risk management solutions by offering various types of insurance products. They protect individuals and businesses from financial losses. 8. Credit Unions Credit unions are member-owned financial cooperatives that provide savings and loan services. They often offer lower interest rates on loans and higher returns on savings. 9. Mobile Financial Services With the rise of technology, mobile financial services have become increasingly popular. These services allow users to conduct transactions via mobile phones. Notable providers include: MTN Airtel Uganda 10. Digital Payment Methods Digital payment methods are revolutionizing how transactions are conducted in Uganda. These include online banking, mobile payments, & e-wallets, making it easier for individuals and businesses to manage their finances. Conclusion Each institution serves a unique purpose and offers different services tailored to meet the needs of individuals and businesses. As we continue this series, we will explore how to choose a bank and understand banking services. #FinancialInstitutions #BankingInUganda #FinancialLiteracy

Kenya's microfinance institutions are facing challenges in growth due to tough competition from various players in the financial industry. Banks, telecom companies, and digital credit providers are all striving for a piece of the market targeted at the lower-income segment. This has led to a decrease in revenues and financial stability for microfinance banks. The Central Bank of Kenya has recognized this issue, noting slow growth in loans and profits. New entrants like digital lenders are focusing on the same customer base as microfinance banks. https://buff.ly/3y4VQ3z The financial performance of microfinance banks has been worrisome over the past few years, with issues such as reduced loan disbursements, declining deposits, increased non-performing loans, and lower returns on assets and equity. Capital and shareholder funds have also taken a hit during this period, with seven consecutive years of losses adding to the challenges faced by the subsector. In 2022, only a few microfinance banks managed to record profits, while the rest reported losses. Digital lenders have had a significant impact on the industry, with estimates showing substantial loan disbursements in recent years. These digital lenders are aggressively competing for the low-income market, posing a direct threat to traditional microfinance banks. Kenya's microfinance banks are at a critical juncture where adaptation and innovation are necessary. The competition for customers is fierce, with digital platforms disrupting conventional banking models. Microfinance banks must find innovative and sustainable ways to cater to their clients while navigating the competitive landscape. #Microfinance #Kenya #Lending #DigitalLoan #FinancialInclusion #EastAfrica #BFSI

Tala Kenya, a digital lender, is set to expand its services by launching a savings product aimed at its over 3.5 million customers, aiming to become a full-service financial provider. Annstella Mumbi, Tala Kenya's General Manager, revealed that the company plans to pilot the new savings feature later this year with a full launch expected by early next year. This move is designed to enhance customer financial health, allowing them to transact, pay, save, and invest all within the Tala app. The new product will compete directly with Branch Kenya, which already offers a similar savings service and recently bolstered its capabilities by acquiring a majority stake in Century Microfinance Bank. While Tala considered acquiring a microfinance institution, Mumbi stated that without a regulatory framework for digital or neo-banks in Kenya, such an acquisition does not align with Tala’s strategic goals. Instead, Tala and other digital lenders are looking to propose regulatory changes to facilitate the operation of neo-banks in the market. Read more: https://lnkd.in/dd5VAUGg #Tala #DigitalLender #Expansion #SavingsProduct #NeoBanks #KenyaFinance

The Vital Role of Microfinance Banks in Shaping the Finance Industry In today’s fast-paced financial ecosystem, microfinance banks are proving to be key drivers of financial inclusion and economic development. Their ability to provide financial services to underserved populations those who often lack access to traditional banking systems has transformed how we think about the future of finance. Microfinance Banks Matter Microfinance institutions fill the gap left by conventional banks by offering loans, savings, and insurance to individuals and small businesses, especially in emerging markets. These institutions empower entrepreneurs, foster job creation, and stimulate economic growth. Through small loans, customers can scale their businesses, which in turn strengthens local economies and reduces poverty. But it’s not just about access to funds; it’s about trust. For many, microfinance banks are the first point of contact with formal financial systems. They create opportunities for people to manage their finances, grow their businesses, and improve their livelihoods building financial stability where it is needed the most. The Waya Bank Advantage As digital transformation accelerates, customers need not only a bank they can trust but also one that offers cutting-edge solutions. At Waya Bank, we’re proud to provide more than just microfinance solutions. Our secure, reliable, and innovative payment gateway solutions allow businesses and individuals to manage transactions with ease. Whether it’s making cross-border payments, handling bulk payments, or ensuring seamless integrations with e-commerce platforms, Waya Bank stands as a trusted partner. Our commitment to security and customer satisfaction ensures that every transaction is not just efficient but also safe. Choose a Bank You Can Trust In an era where digital payments and fintech innovation are redefining the finance industry, microfinance banks like Waya are uniquely positioned to offer inclusive financial services alongside robust payment gateways. Our approach combines the best of traditional microfinance banking with cutting-edge financial technology. At Waya Bank we’re not just providing access to finance we’re shaping the future of it. Trust us for all your payment needs, and let’s create a world where finance is accessible to everyone. #financialinclusion #fintech #digitalbanking #wayabank

Lendsqr, a Nigerian loan management software provider, has officially launched its lending-as-a-service platform in Kenya, marking a significant step towards empowering financial institutions in the country. This innovative platform is designed to support banks, SACCOs, microfinance institutions (MFIs), and digital lenders, making loan management more efficient and accessible. By providing advanced tools to manage lending portfolios, Lendsqr aims to increase credit access and support financial inclusion, especially for small and medium enterprises across Kenya. Kenya’s vibrant lending sector is a key driver of economic growth, but it faces challenges in loan management and scaling operations. Lendsqr’s CEO, Adedeji Olowe, expressed his enthusiasm for addressing these challenges, highlighting that Lendsqr’s technology will allow lenders to serve communities more effectively and reach new markets sustainably. This launch aligns with Kenya’s mission to foster a more inclusive financial ecosystem, offering lenders a pathway to grow their operations without compromising service quality. The Lendsqr platform offers a comprehensive suite of features that covers the entire lending lifecycle, including loan origination, management, credit decisioning, data analytics, collection, and recovery. At one of the most affordable rates, Lendsqr enables seamless integration with lenders’ existing core banking and ERP systems, providing a flexible infrastructure that adapts to diverse lending needs. With advanced AI capabilities, the platform introduces an industry-first feature allowing video and voice integrations in loan origination, which enhances security and accelerates underwriting. Joining the ranks of other reputable loan management providers like Kwara and Presta, Lendsqr brings innovation to Kenya’s SME lending sector. Its cutting-edge, AI-powered tools represent a critical advancement for financial service providers, positioning them to drive growth and support local businesses in the digital age. This partnership underscores Lendsqr’s commitment to reshaping financial technology in Africa and paving the way for a digitally inclusive future for Kenya’s financial landscape. #LendingAsAService #LendsqrKenya #FinancialInclusion #DigitalTransformation #LoanManagement #SACCOs #SMEGrowth #AIInFinance #FinancialTechnology #BankingInnovation #AfricaFinTech https://zurl.co/fUQx

Challenges facing Digital lending sector in Kenya: The digital lending sector in Kenya has encountered several challenges, which have prompted regulatory interventions and industry adjustments. Here are some of the key challenges: 1. Lack of Transparency: Digital credit providers have faced allegations of insufficient transparency regarding the terms of borrowing. Borrowers often find it challenging to understand the true cost of loans due to hidden charges and unclear pricing models. High Annualized Percentage Rates (APR): Many digital lenders impose exorbitant annualized percentage rates on advanced loan amounts. These high interest rates can lead to debt traps for borrowers, especially when combined with short repayment periods. Unethical Debt Collection Practices: In the absence of regulation, some digital lenders have engaged in unethical debt collection practices. Borrowers have reported harassment, intimidation, and aggressive tactics by debt collectors. Abuse of Personal Information: The digital lending sector has been criticized for misusing personal information. Borrowers’ data privacy has been compromised, leading to concerns about identity theft and unauthorized access to sensitive details. Lack of a Cap on Accrued Interest: Previously, there was no limit on the amount of accrued interest for non-performing loans. This lack of regulation allowed interest to accumulate indefinitely, exacerbating borrowers’ financial difficulties. Capacity vs. Willingness to Repay: The sector’s focus on quick loan disbursement and short turnaround times has led to a system that emphasizes willingness to repay over borrowers’ actual capacity. As a result, many Kenyans have become trapped in cycles of increasing debt. Regulatory Response: To address these challenges, the Central Bank of Kenya introduced the Digital Credit Providers Regulations, 2022. These regulations aim to bring transparency, corporate governance, and data protection to the sector. Lenders are now expected to assess borrowers’ creditworthiness based on existing credit information, shifting from a willingness-to-repay model to a capacity-to-repay approach. Despite these challenges, the digital lending sector remains a critical part of Kenya’s financial landscape. Balancing innovation, consumer protection, and responsible lending practices will be essential for its sustainable growth. #financialinclusion #fintechinnovation #DLAK #digitallending