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{
    "id": 1095782,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1095782/?format=api",
    "text_counter": 294,
    "type": "speech",
    "speaker_name": "Kipipiri, JP",
    "speaker_title": "Hon. Amos Kimunya",
    "speaker": {
        "id": 174,
        "legal_name": "Amos Muhinga Kimunya",
        "slug": "amos-kimunya"
    },
    "content": "It has facilitated us to transact from anywhere and do many things. The natural progression of this is another point because I told banks that the new innovation would affect their way of doing things. A few of them tried to fight it and you may remember around 2008 though some agitation in the House, I stepped aside from the National Treasury. The cartels went to my successor, the Late John Michuki and told him that this was a bad thing and he almost stopped it until we ran giving the facts and M-Pesa was saved. We know what M-Pesa has done to the world and not just to Kenya. So, as we look at Equitel’s Easy Loans, M-Shwari, which sprang up from this, Pesa Pata, Pesa Zetu, Uber Pesa all these digital lending platforms, we hear regulators making them look like the devil. They look at how they are squeezing everyone. The reason they are here is because there is a gap in the market that has not been filled. We should look at how to help them continue innovating, helping in financial intermediation and ensuring those without money get without being exploited by the digital shylocks. When talking of a shylock, whether it is digital or manual, it is a shylock and an exploiter. Digitally, we want to ensure that every good person with money to lend and anyone who wants to borrow do so without risking one another. This is because as you may recall as part of the COVID-19 measures, the CBK said that the digital lenders could not refer defaulters to the Credit Reference Bureau. Of course, all the borrowers started borrowing from one platform to pay another while defaulting the other because they knew they could not be reported and this meant an accumulation of debt built or what we would call in accounting terms as ‘kiting’. I borrow from A and because I cannot pay, I borrow from B to pay A and then from C to pay B. At the end of the day, I am just playing around with people’s money. But when push comes to shove and everyone comes for their money, the whole system collapses. We need to have a situation of helping all these people who invest in these platforms save their money. At the same time, we need to ensure they are not overexploiting because of the high risk of lending to high risk borrowers. This Bill will come towards that. We will look at tinkering around with it as we go to the Committee stage to ensure that it helps innovation to grow, protect the borrowers and investors in this field and most importantly, that we can move this a step further to help create some intermediation. If one person has Kshs100,000 that they do not need, through a platform, they should be able to help and lend to a few others. That happens elsewhere. It is called peer to peer lending. I have Kshs10,000 and five people need Kshs2,000 each. We can meet on that platform without declaring that the owner of the platform is performing intermediation which means that they need to be registered as a deposit-taking institution because they are not taking any deposit. They are just having a platform just like Uber vehicles. Uber does not own the vehicles. They create a platform where you come with your vehicle, a customer comes and the two of you meet on the platform. You pay one another and everyone goes. Amazon does not own the goods that it sells. It creates the platform. Somebody sells, the other takes and they facilitate. It should be the same thing with money because as we move, we need to start thinking beyond just what is happening especially if you are to create jobs for our youth in technology. So, I am very happy with this Bill and I want us to open our minds to start thinking of it from that perspective and not just think that we are giving the Central Bank powers to regulate and they come with the traditional hammer to say we are going to kill anyone who is coming with something we do not believe in or we do not understand. It was the same thing with Islamic banking. For a long time, nobody wanted to touch it. People feared it, but I also took the risk and I brought it in this House through the Finance Bill of 2007 or 2008 and we opened up for 25 per The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}