Chinese leaders are dramatically shrinking a market that spawned the nation’s biggest Ponzi scheme, protests in major cities and life-altering losses for thousands of savers.


Mobile loans are a form of Ponzi scheme. Like it or hate it. Just remember its your money on the line. When Eqwete and kcb are busy running a ponzi, its your money, the depositor, thats on the line.

KCB mobile loan interest charges is low & manageable, comparatively.

Important investment facts

You dont have to be in a crowd to be right.

Sometimes, being too early ( in calling out a situation) is indistinguishable from being wrong ( Horward Marks.... I think...)

And someone cannot accuse banks of being too strict in lending/not lending and lending carelessly in the same thread. He has to make up his mind!

Good people,

These are very great arguments on either side.. My few observations

1) The mobile loans are here to stay and they fulfill a certain part of the financial deepening circle. Convenience, not cost, is their critical success factor for now. Cost will come much later

2) These loans, like all other loans, will build many and destroy others. It depends on how one chooses to use them. Heck, there are guys who bet for a living and you'd be surprised the kind of turnovers they do. Forget the Jack pot guys

3)It is true that like all lending, mobile loans need proper regulation especially if it can hit Ksh8B in a month from one platform. We can imagine the impact and pervasiveness of the sector.

4) The biggest risk is that the small businesses,with short cycles and not so large investments are usually the most vulnerable to social hits e,g riots.. But that can always be mitigated by insurances

Finally, I see this a a new step in the evolvement of the financial sector. First, Kenya had foreign banks, then Nationally owned banks came in and they limited the licencing. To cater for the unmet market and especially for SMEs then, they formed Finance houses ( the likes of I&M, ABC, etc).At one point, these were also granted banking licences and the have done a dime well for themselves. When the licencing was stopped, we saw the growth of MFIs... and now we see Micro lending platforms... In essence, banking is changing and it is for the better.

I like the innovation, it has its risks but it is surviving because it has more advantages than disadvantages. We just need to figure out how to mitigate the risks..