I saw this post this from a friend in the industry, I hope he doesn't mind if I quote him.
“If these loan apps really care about their consumers they should add a life insurance component to it. Rewarding those with good credit history. Otherwise the user is caught up in an endless debt cycle with no long term benefit at the end of it. hashtag#insurance hashtag#fintech hashtag#branch hashtag#tala hashtag#data”
When I read this, I could fully understand what he was thinking and, it also reminded me of discussions that I had with some friends in the industry couple of years ago around building a culture of saving in Africa, as opposed to a borrowing one. Unfortunately, we are such a copy and paste people. As opposed to developing solutions that drive savings we have focused on developing more and more mobile loan borrowing applications.
That being said, this is the challenge I would like to issue to businesses and developers driving loan applications, can we consider developing an additional feature to the already built applications that encourages or supports savings?
As it stands, lenders do not give discounts on lending fees, so as we borrow, we are clear that we will need to pay back the principle and the full interest fee charged. Now, let's consider for a minute if a lender is willing to offer a discount on the lending fees why not have that discounted portion of the interest paid to go to a fixed saving account for the borrower?
I would like to be bold and suggest specifically to Mpesa's Safaricom who already have a fixed savings facility on Mshwari and are already giving discounts on lending fees for early payments, to divert this discount and make it a long-term benefit to the borrower. Simply have the borrower make the full payment for the facility and have the discount you are offering to the borrower be applied to their fixed savings account. Similar to what happens with Mshwari over-payments. Once this is achieved an overriding insurance benefit is easy to implement.
We have learnt how to transact on mobile I am sure we can learn how to save on mobile.