This is equally important with: 11 Leadership Lessons from" The Leader in you"-Dale Carnegie 1. Talk less, listen more. People will pay attention to what you say, just because of your position. The leader’s job is to pay attention to what other people say, especially those who think their views don’t count. Show you’re listening by acting on what people tell you, and gain their trust by giving them the credit. 2. Don’t step in with solutions too quickly. No-one learns anything new if you keep doing what you already know how to do, and don’t allow others to try. Anyway, they may find a different, or better way, and if not… mistakes are valuable too. 3. Be authentic. Be authentic, passionate, even emotional, about what you believe in. Share your vision and live your values. The personal is more engaging, even inspiring, than the process. 4. Don’t ‘dis’ downwards. Once a decision is made by the Board, or the leadership team, it’s yours even if you argued against it during discussions. Your job as leader is to get others to believe in, and work towards, a shared goal, not to divide opinion or loyalties. 5. I’m OK: You’re OK. Start from the position that everyone is doing the best they can, then look for ways to support and encourage them – which is so much more rewarding than finding fault. 6. Don’t be the smartest person in the room. Being a leader does not mean knowing more than anyone else. Recognise, encourage and promote others as experts. Give them the trust and autonomy to be creative and do excellent work, defined in their terms. You simply provide the direction, so that this excellent work contributes to a shared purpose. 7. Sense of purpose. Your team know what they do and how to do it, but you can make a big difference by sharing a strong sense of why they’re doing it and where it’s heading. Help them develop a broad understanding of the team’s purpose, and faith in how their role contributes to the whole. (Remember the floor-sweeper at NASA?) 8. Being right isn’t enough. A great idea is of no consequence unless you can convince others to believe it too, and then persuade them to help you make your idea a reality. The best way to do this is to make the idea theirs. 9. Focus on a few things. Focusing on the things that really matter and where you can make a difference. There may be a hundred different distractions and demands on your time and a hundred ways you could respond, but it’s the dozen carefully chosen actions that deliver the results. 10. Get out and about. Get out and about and in the work. It’s hard to retain that sense of what the job’s really about when you are sitting. so Please read it.

1. 1
FSD
Kenya
Creating
value
through
financial
inclusion
Welcome
Highlights of fsd work
on digital credit &
complaints monitoring
Summit on responsible finance in
action/Nairobi/June/2019
Francis Gwer

2. 2
FSD
Kenya
Creating
value
through
financial
inclusion
Project # 1: market conduct and
practices of digital credit

3. Over 6m Kenyans have borrowed at
least 1 digital loan
Usage of non-regulated digital credit
has grown from 0.6% in 2016 to 8.3%
in 2019
High uptake but less clarity on the
size and composition of the supply-
side
New entrants from outside the
prudentially regulated sectors have
emerged
.
NB: Formal borrowing: includes digital borrowing as well
Growth of digital borrowing (%)

4. 4
FSD
Kenya
Creating
value
through
financial
inclusion
Proliferation of lenders has increased attention to wider consumer protection issues
1. Data privacy and ownership is starting to emerge as a concern: (mining, storing and sharing
consumers’ digital footprints)
2. Emerging signs of debt-stress: mobile loans rank second in the proportion of defaulters by loan
types
3. Nothing like a small debt: law permits listing non-performing loans with CRBs yet only 30% of
Kenyans are aware of CRBs
4. Long-running debates on cost
Loan defaulters from credit types: FinAccess 2019 Levels of debt stress(%): FinAccess 2019

5. 5
FSD
Kenya
Creating
value
through
financial
inclusion
Public notice issued by financial sector regulators
regarding fraudulent digital lenders, July 2018

6. • CGAP & FSD published a paper in 2018 looking at the demand-side of digital credit
• FSD incepted work in 2018 looking at the supply-side

7. 7
FSD
Kenya
Creating
value
through
financial
inclusion
Download digital credit
Apps from both Google and
iOS stores
(Total of 110 Apps)
 Register to use the loan apps (64
successful)
 Check for data & app permissions
requested
 Request for credit limit
(39 lenders, max amt 16,000)
 Borrow from providers who
issued credit limit
 Two loan cycles
 Repay first loan at 5 days
 Repay second loan at
maximum duration allowed
 Total of 40 loans
 Check your credit history from all
three credit reference bureaus
(54 reports)
Belling the cat
Understanding market conduct & practices of providers
9 research assistants:
2 never borrowed
4 borrowed & repaid
3 with default histories
Step 1
Step 2
Step 3
Step 4
Step 5

8. 8
FSD
Kenya
Creating
value
through
financial
inclusion
110
65
47
A market that is easy to enter and exit..

9. 9
FSD
Kenya
Creating
value
through
financial
inclusion
Offering savings services when you are
not a deposit-taking institution is
illegal
Even for unscrupulous ‘lenders’
Require the payment of a registration fee
Mimic mainstream and established lenders

10. 10
FSD
Kenya
Creating
value
through
financial
inclusion
Data requested by fintech lenders
Phone No
Name
Email
ID No
Age
Gender
Physical
address
Economic
status
Social media
acc
Income range
Data requested by banks
Phone No.
ID No.
Name
Age
Email
KRA PIN
We will seek to protect your data and funds available in your account, however, this is not something we are able to guarantee. …You
consent to the storage, transmission of data and communications through the Internet and you acknowledge that the Internet is not necessarily a
secure communications and delivery system, and you understand the confidentiality and other risks associated with it…We accept no liability if
communications sent via the platform are intercepted by third parties or incorrectly delivered or not delivered.
Use of data is far-reaching
For this purpose, I hereby waive my rights on the confidentiality of client information and expressly consent to the
processing of any personal information and records relating to me that might be obtained from third parties
Should we wish to use your information for marketing purposes, we will inform you prior to such use. You shall be entitled to prevent such
usage by informing us, within 10 days of being informed of the proposed use, that you do not wish to disclose such information

11. 11
FSD
Kenya
Creating
value
through
financial
inclusion
Lender
No.
loans
issued
Credit
reports
submitted
Tala 4 0
Dolax 1 0
Stawika 2 0
Upazi 1 0
Branch 2 5
Okolea 2 2
Timiza 3 8
Utunzi 2 0
Usawa 1 0
Craft 2 0
Kano 2 0
KCB M-Pesa 1 0
PesaPap 2 2
PesaZone 2 0
Stawika 1 0
M-Shwari 2 4
NIC Mobile
loan
2 6
Ubapesa 2 1
mKey 2 2
GetSaida 2 0
Kopa Cash 2 0
MCo-op Cash 1
Default history vs successful borrowing
• All banks required to submit credit histories to all the
three CRBs (Only 1 consistently submitted)
• Non-banks can submit voluntarily (and some are
submitting)
• 40 loans issued, 10 by banks and 30 by
non-banks
• 5 loans issued by non-banks to
borrowers with default histories (after 32
borrowing attempts)
• Inexperienced borrowers made 20
attempts but only 1 loan was issued by a
non-bank
• Rest of the loans issued to borrowers
without a default history
Compliance with CRB reporting requirements

12. 12
FSD
Kenya
Creating
value
through
financial
inclusion
49%
240%
1685%
Median APR
For both bank and
non-
banks
Lowest APR
Highest APR
(Issued by a non-bank
lender)
Bank lenders have
lower APRs than
non-bank lenders.
Pricing remains high

13. 13
FSD
Kenya
Creating
value
through
financial
inclusion
Project # 2: monitoring financial
consumer protection via social media

14. 14
FSD
Kenya
Creating
value
through
financial
inclusion
Launched @Pesastory Twitter
handle to initiate conversations
with Kenyans on their experiences
with consumer protection issues.
3
Launch
Flagged tweets relevant to each
topic over 3 months. Not all
tweets were relevant and we
periodically added keywords to
make filters more effective
2
Monitor and analyze
Tracked every tweet to 29
financial institutions and sorted
them into 10 consumer
protection topics by keywords
1
Track
Testing the utility of Twitter to
provide insights on financial
consumer protection issues and
encourage a public dialogue
through the creation of a Twitter
handle, @Pesastory
Pesastor
y
FSD Kenya.
CitiBeats
Using CitiBeats AI text
analysis platform to track
and analyze consumer
protection relevant tweets
August to November 2018
Process
2 experiments in 1
Curate threads of tweets on
related topics to demonstrate
common experiences &
challenges.
4
Curate

15. 15
FSD
Kenya
Creating
value
through
financial
inclusion
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Providers
% Tweets per category, by provider
2%
7%
10%
0%
21%
3%
7%
3%
50%
2%
Agents
Blacklisting
Charges
Frozen account
Functionality
Insurance claims
Loans
Privacy
Resolution/customer service
Scams
Distribution of tweets across consumer protection
topics for a Kenyan bank, November 2018
Percentage of Tweets related to this topic
Observation 1:
• Most tweets are on customer service followed
by functionality.
• Distribution fairly similar across banks and MNOs
Platform allowed us to restrict data to a single provider
At any given time

16. 16
FSD
Kenya
Creating
value
through
financial
inclusion
On 2nd Nov Platform showed 65 tweets sent to EB on customer service
Sample Tweets sent by Equity customers on 2nd Nov
Observation 2(1): analysis is useful in
detecting spikes in customer concerns

17. 17
FSD
Kenya
Creating
value
through
financial
inclusion
Spike in Ecobank appeared to relate to access to accounts by customers
Observation 2(2): monitoring trends over time
Visual representation of how the volume of tweets on CP issues change over time for providers
Observation 3: Missing data on finTechs
• Twitter users most likely own a
smartphone
• Volume of tweets on fintechs very low
• Most have in-app functions for
complaints

18. 18
FSD
Kenya
Creating
value
through
financial
inclusion
Reflections: what do the results mean?
It's useful for you to write something special
For consumers-
• Digital credit: the digital world is shifting risks in
financial services with both positive and negative
consequences for consumers
• Complaints: Need to assert their rights. Social
media is changing ways in which customers
engage with providers, allowing them to publicly
call-out consumer protection issues
For regulators-
• Gains made have been undermined by
absence of effective regulation
• There’s utility in leveraging social media
analytics for consumer protection market
monitoring especially in markets with fast-
growing DFS
• Such methods should not be seen as a
replacement of existing tools but rather an
enhancement

19. FSD Kenya | Creating Value through financial inclusion
19
Thank You
For your time!
FSD Kenya | Creating value through financial
inclusion
3rd Floor, 9-Riverside, Riverside Drive
P.O. Box 11353, 00100 Nairobi, Kenya|
Telephone: +254 20 513 7300
Website: www.fsdkenya.org |
Creating Value through Financial Inclusion
FSD Kenya.