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Digital lenders urged to embrace financial inclusivity

The government has called upon digital lenders to embrace financial inclusion which is a crucial enabler of economic growth as the country works towards achieving Kenya’s Vision 2030 and attaining the Sustainable Development Goals (SDGs).

Ministry of ICT, Innovation and Youth Affairs Cabinet Secretary (CS) Joe Mucheru said that while the lenders have made great strides in formal financial inclusion in the last decade, they still remain a key opportunity area in developing and emerging markets.

Mucheru said that in Kenya, the results of the 2019 FinAccess Households Survey revealed that formal financial inclusion has risen to 82.9 per cent, up from 26.7 per cent in 2006, while complete exclusion has narrowed to 11 per cent from 41.3 per cent in 2006 thanks to mobile money.

Tala Country Growth Manager, Annstella Mumbi (left) and Director of First Principles Limited, David Cracknell enlightened the participants on financial matters during the Tala Credit Loan Option Launch on Wednesday, 9th February at Sarova PanAfric Hotel Nairobi. Photo by Widen Ratemo

The CS said this in a speech read on his behalf by the Chief Administrative Secretary (CAS) for ICT and Broadcasting Ms. Maureen Mbaka at a Nairobi hotel on Wednesday during the launch of Tala flexible loans credit options dubbed jichagulie due date.

Mucheru added that financial technology deployed by Fintech companies such as Tala has been a fundamental tool in enhancing significant financial inclusion mainly to unbanked Kenyans who had been left out of the formal financial economy.

He said that by leveraging alternative forms of data for underwriting, the company has been able to make key advancements towards democratizing access to credit for Kenyans.

“To grow, thrive and deliver your promise to the global unbanked, Tala will have to continue putting customers at the forefront of their innovations. Tala should also continue with their co-operation with the various regulators such as the Central Bank of Kenya following the passing of the CBK Amendment Act which places you under the regulatory ambit of the CBK,” said the CS.

He highlighted that Kenya has embarked on its digital transformation journey that informed the formulation of the country’s Digital Economy Blueprint which is a roadmap for the digital transformation of the economy that seeks to see every citizen, enterprise and organization get digital access and the capability to participate and thrive in the digital economy.

“Financial inclusion is at the core of our mission. To reach these goals and follow our pathway towards a digital economy, we must build collaborative ecosystems that facilitate digital transactions on a national, regional and global scale. This is the rationale that informed Kenya’s digital economy blueprint,” said Mucheru.

Tala Country Growth Manager Annstella Mumbi said that for the seven years they have been in operation in the country, they have remained driven by their founding mission which is to empower the global underbanked to take control of their financial lives.

“Since the company started in 2014 as the market pioneer in digital credit, we have continued to do this by developing financial products that have not only shaped the Fintech sector as we know it today but have also positively impacted the economy by bringing access to financial services to over three million Kenyans and with $1 billion in loans disbursed,” said Mumbi.

She added that with the new product, they are giving every Tala customer the power to choose the due date that works best for them explaining that it was developed after a rigorous user research process in collaboration with their customers.

“This new flexible credit option seeks to put the power of choice and control in the hands of our consumers by allowing them to choose the due date that works best for them, not Tala. Kenyans can now time their due date around their next pay day and other financial obligations, making repayment easier, and enjoy lower fees depending on the duration they choose,” she said.

Mumbi said that they will continue being customer-first in their innovation while proactively centering responsible lending practices at the core of their business operations, even as they move into a new operating environment under the ambit of the CBK.

By Joseph Ng’ang’a

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