StanChart says its mobile loans platform now ready for roll-out

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Stanchart CEO Kariuki Ngari addressing shareholders on March 14, 2023. PHOTO | WILFRED NYANGARESI | NMG

Standard Chartered Bank Kenya expects to roll out its mobile lending service by the end of this month, joining other lenders in the race for the growing digital credit market.

The financier said last week it has now ironed out data privacy concerns that had delayed the rollout of the loan platform, which was first announced in mid-2021, and has already received Central Bank of Kenya (CBK) approval.

StanChart expects that mobile lending will help grow and diversify its existing business alongside the affluent individual and corporate segments that have been the most lucrative client groups for the bank.

It has, however, said it does not intend to use the mobile loan app as a route to penetrate the mass market, but rather decongest its branches of borrowers seeking credit services.

“By the end of this month we should go live … we’re now doing internal testing,” Stanchart Kenya chief executive Kariuki Ngari told the Business Daily.

The prolonged wait for the new product was partly informed by the bank’s concern over data privacy in the mobile lending segment.

Many digital lenders in the past accessed private mobile user data from borrowers for use in determining whether to lend and the rates to charge.

Invasive use of customer data was also being seen in the actions of some mobile lenders who resorted to debt shaming tactics to recover loans—mostly by informing their friends and family of defaults using contact information scraped from their phones or by threatening to tell their employers.

The CBK, however, stepped in with tougher regulations for the digital lending segment, while the Data Protection Act also bars sharing of information with third parties without consent and gives individuals the right to be told when their data is being shared and for what purposes.

“It was all about AML [anti-money laundering] and compliance issues that came about…in terms of what data can you use to inform the credit decision,” said Mr Ngari.

“Now it is different. We will use very different sources of data, where the credit reference bureau is going to be key for instance. It’s about using alternative sources of data that are compliant.”

The lender will be joining its top-tier peers such as KCB which runs KCB-M-Pesa, Equity (Equitel), NCBA (M-Shwari), Co-op (MCo-op Cash) and Absa Kenya (Timiza) when it rolls out its mobile credit offering.

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