Blockchain microfinance micro loans will be extended to 220 food stall retailers across Kenya through a partnership between IBM Research and Twiga Foods.

Twiga Foods which is a business to business logistics platform for kiosks and food stalls in Kenya were looking to extend their logistic services into a total market ecosystem by adding financial services.

According to Isaac Markus, the IBM Kenya Researcher, IBM has been looking to spearhead efforts for blockchain rollout on their open standards. They choose Kenya to introduce blockchain microfinance because their targets aligned with the Kenyan government’s big four agenda which includes:

1. Affordable and decent housing
2. Manufacturing
3. Food security
4. Universal healthcare

IBM Kenya Researcher partnership with Twiga Foods is a first of its kind and the result of the project will be the evidence to the positive effect of the blockchain technology and its use to our everyday life.

There has already been an 8-week pilot this year which processed more than 220 blockchain microfinance micro loans with the average loan worth $30. The loans were for 4 and 8 days with an interest rate of 1% and 2% respectively. The loans were cashless and went directly to the capital for the businesses.

When a retailer had an order delivered, they would receive an SMS with the blockchain microfinance micro loan options for financing that order. They would then reply to the SMS confirming the loan option that they wanted.

At the end of the pilot, users reported the value and utility for the technology with many of them becoming repeat users.

IBM said that they are looking at opportunities locally to offer more blockchain microfinance. They said that financial services, supply chains, IoT, risk management, digital rights management and healthcare are some of the areas that are poised for dramatic change using blockchain networks in South Africa.

This project will see Twiga Foods, the Kenya based startup, use machine learning and the blockchain technology to determine a credit score and distribute blockchain microfinance micro loans for small food stands across Nairobi.

The technologies address a basic challenge in the region, how can businesses get access to microloans without a credit rating to scale-up their businesses.

This platform links SME’s, banks and FMCG’s to enable access to working capital and assist the SME in developing a financial profile or identity.

NEW YEARS RESOLUTION GOALS.

Have you written one yet? Or do you think New Year’s goals are just unproductive publicity stunt?

People who make money resolutions each year feel more financially confident and secure by year-end than those who skipped a resolution. Committing to a big goal is one thing; planning a smart strategy to see it through is another.

Here are some of our New Year’s resolution ideas:

RESOLUTION 1: SAVE MORE FOR RETIREMENT

You should plan to put aside about 15% of your income for your retirement plan. This will also raise your savings rate automatically each year. Most people making New Year financial resolutions say their priorities are spending less, saving for retirement, and cutting debt.

Make a budget and stick to it. One rule of thumb: 50% to essential expenses, 15% to retirement savings and 5% to short term savings.

RESOLUTION 2: SPEND LESS

Need help sticking to a budget? One proven method that can help get your spending under control is Pay in cash. This is because when you spend can unlike credit cards or digital money it hurts more and there is always so much you can carry in cash.

People are always willing to pay nearly 65% more for entertainment when using a credit card or digital money rather than cash.

To curb merry spending, set aside a weekly amount in an envelope for optional items like eating out. When the envelope runs out, you are done.

Don’t like carrying cash? Psych yourself out. People are willing to incur 28% more credit card debt when they remembered two times they indulged in a spendthrift behavior, compared with when they remembered times they abstained.

So if you find yourself tempted by a binge, think about a few times you successfully avoided budget killers

RESOLUTION 3: SAVE FOR AN EMERGENCY

One of your New Years resolutions should be to put aside more money for emergencies? To make this easier, automate it. Just as you should do with your retirement savings

You don’t have to increase your savings significantly to make a big difference long term. Just upping your contributions by 1% of your salary can go a long way.

Have HR or your bank direct a portion each pay check say, 5% into a savings account. That way, you never see it. Cover up your savings with bonuses like tax refunds, and at least part of any extra earnings from side gigs. If you get a raise or finish paying off a loan, add that money too.

Aim to build up three to six months’ income. Need extra help? Tell a friend. Remember those who shared their New Years resolution goals were 33% more successful than those who didn’t.

RESOLUTION 4: PAY OFF DEBT

Student loans, credit card debt, a car loan, the best strategy for paying them all off is by being strategic. Pick one debt to focus on, and pay just the minimum on everything else.

Credit card debt should be your top priority. You have two choices here. You’ll save the most in the long run if you focus first on the card with the highest interest rate.

But if you feel overwhelmed, wrestle the card with the lowest balance so you’ll have a success under your belt. Remember people are more likely to pay off their entire credit card debt if they paid the smallest balances first. Go with what encourages you.

RESOLUTION 5: BALANCE YOUR TIME

Find ways to grab back some time. If you can work from home one day a week, you’ll still have lots of time to see and interact with your colleagues, and skipping the commute gives you back that time.

Delegating a few work tasks to junior staffers can also help. It’s a classic win win: Your employees get a chance to gain experience and prove their determination while you get some precious free time back. Balancing your time is an important New Years resolution goal that can also affect your health positively.

Kenyans, you are on your own and it’s your money on the line.

No matter what anyone in the financial services promises, in reality consumers are on their own. Am sure regulators, financial institutions and their representatives will want Kenyans to believe they are protecting us.

If representatives are people of integrity then I may be wrong, but it’s a whole other ball game if they are not.

Kenyans must accept that to protect themselves against rogues they must take matters into their own hands. They must stop blindingly doing what they’re told by their banks, life insurers and financial advisers.

Kenyans must test all advice they are given. They must reject advice that doesn’t pass the breath test. They must treat it like advice from real estate agents, builders, mechanics, salespeople or politicians.

Yes, talk to these people, listen and learn from them. But always remember it’s your money on the line, not theirs.

Fintech companies offering loans has led to an increase in greedy lending practices in Kenya, Central bank governor said on Tuesday, calling for the sector to be regulated.

Kenya as a pioneer of financial inclusion through its early adoption of a mobile money system that enables people to transfer cash and make payments on mobile phones without a bank account.

A huge rise of Fintech companies (financial technology companies) are using the same technology to extend credit to the banked and unbanked alike, burdening Kenyan lenders with high interest rates at the same time leaving regulators struggling to keep up.

From having little or no access to credit, many Kenyans even the ones who can’t afford these loans are now finding they can get loans in minutes through these Fintech companies.

“There’s an increase in let’s say Fintech companies that are taking advantage of our population,” Patrick Njoroge told executives in the digital financial services industry at a conference in Nairobi.

“In a sense what has happened is there is an opportunity by some predators and they are preying on our population.”

Since 2015, 2.7 million people in Kenya out of a population of around 45 million have been negatively listed on Kenya’s Credit Reference Bureau, according to a study by Microsave, a consultancy that advises lenders on sustainable financial services.

Kenya is thought to be a test case for the new mobile cash lending platforms. A number of companies involved, including U.S. fintech companies, have plans to expand in other cutting edge markets, meaning Kenya’s regulation will be closely watched.

Patrick Njoroge said he did not like the idea of his country being a “guinea pig” for new technology deployed by foreign fintech companies.

“What I think is worrisome is a lot of products that are coming in a sort of a fly-by-night operation and you only hear about it because somebody gets burned,” he said.

He said the risks to Kenyans showed there was a need for regulation in the booming mobile money lending sector.

A draft bill published by the finance ministry last week for review and comment by the public and industry says digital lenders will be licensed by a new Financial Markets Conduct Authority and lenders will be bound by any interest rate caps the Authority sets.

But it is not clear if fintech companies are subject to the current government cap on banks’ interest rates which has slowed private sector credit growth since it was introduced in 2016.

Earn money online with a side hustle.

Many Kenyans today, mostly younger than 35 have the desire to earn money online and turn it into their primary business, am one of those ambitious people. My side hustle, is creating content for both my website and my YouTube channel coming from a background of working online as a freelance editor.

With the outburst of the gig economy, millennials are looking to take their mobile phone, download an app and earn money online. But starting a side hustle requires serious groundwork, from picking the right hustle to finding the money and energy to do it.

Monetizing what you Love

Many people choose a business that takes advantage of skills they’ve developed at a 9-to-5 job.

Do your research before you settle for your desired side hustle which should help you earn money online.

Make sure the online side hustle you pick is something you love, you are also able to find enough customers and you have the right character to hack it.

The Cost to Earn Money Online

It’s all about the money. They say you need money to make money, though some business need less money to start making money. With a laptop and a phone, you are good to go. You may need to plan out your costs and build a cash cushion to fund your online side hustle. Remember to take advantage of free or low-cost resources such as WordPress.com to build a website, and use social media to build a marketing base.

If you’re selling a physical product, you may find your clientele on shopping sites, such as www.ebay.co.ke, www.jumia.co.ke or even www.masoko.com. www.ebay.co.ke is totally free and allows you to upload your shop design to put on hundreds of products. You earn money online by selling your product to the Kenyan customer already searching the internet for your products.

For less-tangible services, you’ll need to market your skills to find customers. Don’t be scared to promote yourself or your brand. Use Facebook, Instagram and Twitter and to your surprise if your service is good your followers will do the rest through retweets and likes.

Most side hustles are set up as low-cost sole proprietorships. And although many gigs cover some personal accountability, do your own research: Protection varies among platforms. Don’t forget about the Tax man, you must register your business and complete your personal tax return. You are required to report all of the income made through your side hustle.

However, if your business grows, consider consulting a lawyer to set up a limited company, which separates your personal assets from those of your online business. If you earn money online more consistent, then you can count yourself as a genuine side hustler.

What is a credit score?

This is a question many would like to understand.  Credit Score are the factors that are considered when credit bureaus calculate your credit record.

Credit records are used by credit providers to determine the amount of credit to offer a consumer, and on what terms.

A consumer’s credit score is calculated by a credit bureau based on a person’s credit report. The bureau considers how a consumer pays their bills, how much debt they have and how all of that relates to other credit active consumers.

The Credit Bureau

Each bureau has a different way of calculating the credit score. They take into account different forms of information, including information their organisation already has on you, or your employment circumstances.

Major credit bureaus like Metropol Corporation and Creditinfo Credit Reference Bureau Kenya Limited provide a service that can check your credit report; consumers are advised to check their reports and immediately query any possible errors.

Factors affecting your score

One factor that may affect your score is the number of searches companies and banks have made because of multiple applications for loans or store cards.

This shows that you have been trying everyone and everywhere to get credit, but you were not successful. If you were successful there would only have been one or two searches. This increases your risk and reduces your credit score.

Another factor affecting consumer’s credit score is how long they have been in the same job and at the same address. Credit providers are looking for stability in consumer behavior.

The record also shows on which accounts payments were made late, and for how long accounts have been in arrears. The consumer’s credit record also reflects default court rulings.

Most important component

The single most important component of the credit score is the payment history, which makes up about 35% of the total score. Late payments will reduce one’s score.

A high score means the consumer has a healthy credit record. It will make it easier to borrow money at a lower interest rate.

We hope this has been informative and know you have a better understanding on what is a credit score.

Paying off debt fast especially the bad debt should be your priority. There is good debt and bad debt, and if you have bad debt on a credit card or through a personal loan, paying off debt should be your priority.

Whether you owe 3,000 Kshs on Mshwari or tens of thousands over other Mpesa loans, plus a car loan, the thought of trying to get out of that hole can seem overwhelming. But you just need to take things one step at a time to enable you pay off debt fast.

First, work out exactly how bad things are especially your bad debt. Make a list of all your debts. If you have only one loan it’s pretty simple, but if you have several loans you need to make a list. Include every credit card and any personal or car loans you may have.

Write down the outstanding loan balance, the loan interest rate and the minimum monthly loan repayments. Add them all up to figure out the total loan amount you owe.

If you have more than one bad debt, a common suggestion is to list them in order of interest rate from highest to lowest. The idea is that you focus on the debts on the top of the list first. If two have the same rate, make the smaller loan balance your priority.

Continue paying off debt that is lower on the list, with minimum repayments. Once you have paid off the first debt divert the extra money to the next one on the list.

Another option is to use the snowball method, ranking bad debts by balance instead of rate. Then, focus on paying off debt fast with the lowest balance first. Pay as much as you can off that first smaller debt, making only minimum repayments on the others. Once the smallest debt is cleared, move to the next debt.

A big attraction of the snowball method of paying off debt is that, as you clear the small debt you should get a strong sense of satisfaction when you cross it off your list.

You really need to pay off debt as much as possible and ensure paying off debt is a priority, even over savings. It’s not much use putting money in a Savings account giving you 5% interest when you’re paying off 15% in interest on a bad debt.

Yes, have an emergency fund of a few thousand shillings so you don’t have to rely on your credit card for unexpected expenses but don’t forget to make paying off debt a priority.

If you have any “extra” money, use it to reduce your debt. For example, if you get a lump sum such as a side gig that went through, put it towards paying off debt.

Another option if you have credit card problems is to take up an introductory balance transfer offer with another bank. A common term is 0% for six months but more banks are offering longer periods.

For example, some Platinum card offer 0% for 24 months with a 1% balance transfer fee. As well as the transfer fee, consider the annual fee on the credit card and what rate you’ll be charged when the promotion ends.

The right choice depends on how much you owe and what you can afford when paying off debt each month. Of course, don’t make any new purchases; just focus on paying debt fast.

If you have several debts, consolidation might be an option too. This involves rolling over all debts into a single loan, whether it’s a personal loan or mortgage.

The best thing about consolidating your debt into a personal loan is that you make one repayment each month instead of several. You know that at the end of the loan term the debt will be repaid and out of your skin forever.

The other plus is that you can consolidate other types of debt as well, such as car loans depending, of course, on the loan amount that is approved.

If you have equity in your home, rolling over the debt into your mortgage is worth exploring. The biggest plus is that a mortgage is one of the cheapest loans you can get. If you take this route make sure you find out if you’ll incur a fee for topping up the loan.

If you have a small debt and the fees are high it might not be worth it. It’s also important to make extra repayments on your home loan to help you pay off debt fast, rather than extending it over the remainder of your loan.

Make your Commutes More Productive by hacking the brutal Nairobi traffic.

ARE YOU STILL SPENDING your commute snooping on Facebook or listening to Mwalimu King’ang’i? If so, Why?

The average Nairobi traffic in your morning commute wastes about 2 hours of your day one way. That’s four hours of time your life not occupied by office or family, giving you a golden opportunity to set a productive tone each day. This is how you can turn your wasted commute time in a productive routine.

MAKE LISTS

Make a rotating to-do list going: short term, medium term, long term. Being both efficient and strategic with your time is essential.

Scheduled your list right into your calendar and treat it like a non-movable meeting.

TAKE INVENTORY

Take mental account and set goals for things you want to get done that day. During your drive to work, think about the day ahead. You can keep a notepad next to you so that you can write down ideas when the vehicle stops at traffic.

ENERGIZE AND UNPLUG

Being productive is being a well-oiled engine. This starts even before you commute. One of the most productive things you can do is get in a solid workout. A good sweat keeps you sharp for the day ahead.

Also sitting down with your family in the morning, enjoying breakfast, and talking to each other with no phones! Removing emails, appointments, texts, and any sort of notification in the morning will put you in the right mindset for when you are ready to kill it at the office.

READ UP ON YOUR INDUSTRY

I’m a big fan of pdf magazines on my tab or phone. Reading about other great leaders and innovators gets my juices flowing and inspires me to think bigger.  Download pdf magazines on your phone or tab, scan through to stay up-to-date on the latest news in your industry.

Keeping up with industry trends and news is important and great to do over morning coffee.

STOP DRIVING

Nairobi rush hour traffic can be brutal, so I take an Uber when you can and arrange your schedule around it. Nairobi traffic hour can be tiresome, not forgetting the hustle of looking for parking and the costs parking in Nairobi. You can use the commute time more productively.

Catch up on email with your customers and your offices in the earlier morning time zones.

Tala loan app formerly Mkopo Rahisi has been nominated for Google Play Awards 2018 which takes place on Monday, May 7^th.

Google Play Awards (Google I/O 2018) recognize top apps and games on Google Play every year, represent some of the best experiences available on Android, with an emphasis on overall quality, strong design, technical performance, and innovation.

Tala loan app as one of the nominees, has been selected by various teams across Google, meeting the criteria thresholds covering high star rating, Android vitals, and have had a launch or major update since April 2017.

The nominated Apps including the Tala loan app were picked by looking at the following features:

• The best experiences available on Android
• Good quality
• Design
• (Technical) Performance
• Innovation
• High star rating on the Play Store
• Received at least one major update over the last one year
• Get all the Android vitals right

The apps that are picked by the Google teams, 5 per category, are considered as nominees out of which the winners will be picked and announced during Google I/O.

Tala, a global leader in mobile-first financial services for underserved consumers, has also announces a Ksh 6.5billion (US$65 million) in new investment to power the growth of its Tala loan app.

Tala operates in Kenya, Tanzania, and the Philippines, where it has delivered credit to nearly 1.3 million customers and originated more than $300 million.

Tala plans utilize the funds to focus on product development and growing human talent capacity in Kenya and expand its services to cover Mexico and India.

In Kenya, Tala has disbursed over 5.6 Million loans to over 1 million customers with an origination value Ksh 28 billion (US$280 million). Tala loan app, which was Kenya’s first unsecured smartphone lender, has over 2.7 million APP downloads in Kenya and it’s ranked as one of the top financial applications in Kenya.

Early in the year, Google also recognized numerous apps in the Android Excellence Awards.

Congratulations to Tala loan app and all the other nominated apps on this year’s list of apps on Google Play Awards Google I/O 2018.

Before taking a loan it is wise to read our 5 Questions to ask yourself before you take a Loan.

To apply for an Mpesa Loan check out these Top 10 Loan Apps in Kenya, KCB Mpesa Loan, Saida Loan, MShwari, Timiza Loan, okolea Loan, Okash Loan, Branch Loan.

See: How to apply Fuliza Mpesa Loan

OKash loan app by Opera Group subsidiary Opay has hit over Sh10 Million transactions daily, only just two months after its launch.

The mobile phone-based loan app available on Google Play, was launched in March and currently has over 100,000 daily active users with total downloads of about 300,000.

Opera managing director Eddie Ndichu said this shows demand for shorter term loans in the market with incentive for earlier repayment.

“We know that there are more than 20 million people in Kenya who use loans actively every day and we want to give them a high-end product with an exceptional user experience to make their life more comfortable when applying for and making payments with loans,” said Mr Ndichu.

Users download OKash loan app and set up accounts using their MPesa accounts. By filling out a set of questions, users get an answer on their loan application through their mobile phones.

OKash loans start as low as Sh1,500 and go up to Sh500,000 at an interest rate of one per cent daily, repayable within 14 days. The faster a user pays off an active OKash loan, the sooner they can request for a new loan.

Customers paying their loans on time and consistently can apply for a single loan of up to Sh500,000 at five per cent.

To repay the OKash loan, the customer needs clicks on the payment button on the app and it’s processed through the MPesa STK push service. The amount is debited directly from the user’s MPesa wallet.

Before taking a loan it is wise to read our 5 Questions to ask yourself before you take a Loan.

Check out the other Top 10 Loan Apps in Kenya, KCB Mpesa Loan, Saida Loan, MShwari, Timiza Loan, okolea Loan, Branch Loan, Tala Loan.

See: How to apply Fuliza Mpesa Loan