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And you're completely right. As someone that lives in Kenya and has used these apps, I can count in one hand the number of apps that I consider 'ethical.' The k

And you're completely right. As someone that lives in Kenya and has used these apps, I can count in one hand the number of apps that I consider 'ethical.' The kinds of interest rates they charge are seriously absurd and some go as far as charging 10% interest per day that you're late paying the loan :/ On the bright side, while there are over fifty of these shady apps, most loans (including on mobile) - something around 84% of them, if I remember correctly, are still issued by banks. But overall, another issue it raises is the reason Kenya (I'm not sure about other African countries) is really slow in innovation in the software field. Tala was one of the first loan apps to be released and it remained like that barely for months. The next thing you know, there are over a dozen of them and new ones keep getting released every year! It's mad! The same thing happened with SportPesa, a gambling platform that later quit the Kenyan market. Once people realized SportPesa was profitable, the number of copycats went through the roof. Competition isn't a bad thing, sure, but once they really hit the mainstream, it's insane how many people would rather copy something that works than try something new themselves.

sosborn 7y ago
> it's insane how many people would rather copy something that works than try something new themselves. Is it though? If an idea is proven to be profitable it seems to follow that the idea is worth pursuing.
Ozzie_osman 7y ago
I grew up in a North African country (and was part of and remain involed in the tech scene there till now), and Kenya is actually viewed pretty favorably on the tech/fintech side... I think in no small part due to M-Pesa's success.
gruez 7y ago
> The kinds of interest rates they charge are seriously absurd and some go as far as charging 10% interest per day that you're late paying the loan :/ Naive libertarian question: is this an issue when the rate is clearly conveyed to the consumer, and it's the rate needed to make a profit given the high default rate and/or overhead? That interest rate should be close to the market clearing rate (ie. minimal profit), assuming it's not too difficult to get into the lending space.
- saint_fiasco 7y ago
  The only time it makes sense to charge super high interest is if you expect lots of customers will default. That means you already know your business will end up causing lots of people to be in debt forever. If you choose to go ahead anyway, obviously people are going to think you are evil.
  - DuskStar 7y ago
    It also means that many people think that your loan is worth risking beimg forever in debt for. If I offer you a loan and you need the money to pay for medicine for your child... Is that really a trade that no one would welcome with open arms?
    - vertex-four 7y ago
      Generally speaking most reasonable people think basic healthcare should not put people in life-changing debt. They view any entity which puts people in such debt with serious suspicion, as being a clear part of that system.
      - DuskStar 7y ago
        That's nice. But while places like Sweden or the US have the per-capita GDP to pay for universal health care, Kenya really doesn't. (The US has 40x the GDP per capita) So would you rather that there wasn't even the option to go into life-changing debt, and instead death was the only outcome?

sosborn 7y ago

> it's insane how many people would rather copy something that works than try something new themselves. Is it though? If an idea is proven to be profitable it seems to follow that the idea is worth pursuing.

Ozzie_osman 7y ago

I grew up in a North African country (and was part of and remain involed in the tech scene there till now), and Kenya is actually viewed pretty favorably on the tech/fintech side... I think in no small part due to M-Pesa's success.

gruez 7y ago

> The kinds of interest rates they charge are seriously absurd and some go as far as charging 10% interest per day that you're late paying the loan :/ Naive libertarian question: is this an issue when the rate is clearly conveyed to the consumer, and it's the rate needed to make a profit given the high default rate and/or overhead? That interest rate should be close to the market clearing rate (ie. minimal profit), assuming it's not too difficult to get into the lending space.

saint_fiasco 7y ago
The only time it makes sense to charge super high interest is if you expect lots of customers will default. That means you already know your business will end up causing lots of people to be in debt forever. If you choose to go ahead anyway, obviously people are going to think you are evil.
- DuskStar 7y ago
  It also means that many people think that your loan is worth risking beimg forever in debt for. If I offer you a loan and you need the money to pay for medicine for your child... Is that really a trade that no one would welcome with open arms?
  - vertex-four 7y ago
    Generally speaking most reasonable people think basic healthcare should not put people in life-changing debt. They view any entity which puts people in such debt with serious suspicion, as being a clear part of that system.
    - DuskStar 7y ago
      That's nice. But while places like Sweden or the US have the per-capita GDP to pay for universal health care, Kenya really doesn't. (The US has 40x the GDP per capita) So would you rather that there wasn't even the option to go into life-changing debt, and instead death was the only outcome?