Muhammad Yunus, Bangladeshi economist and 2006 Nobel Peace Prize laureate, speaks on eradicating malnutrition at the opening of a food production plant in Barreal de Heredia, near San Jose, November 25, 2013. REUTERS/Juan Carlos Ulate
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In Kenya, Africa's financial-technology pioneer, there are now more people keeping money on their phones than in banks. Almost one-fifth of mobile-banking borrowers there defaulted last year -- like Barasa, who has failed to pay three separate loans. In 2018, there were 395.7 million mobile-money accounts in the region, or almost half of the world total; the $26.8 billion handled represents two-thirds of the total transactions, according to GSMA, which represents 750 mobile operators around the world.In Kenya, with more than 50 mobile lenders offering loans ranging from $10 to $400, officials are trying to get their arms around a business that took off after a 2016 law capping interest rates to reduce borrowing costs. Banks instead invested more in government debt and tightened their standards, sending small unsecured borrowers to mobile lenders.Tala, whose biggest market is Kenya, has disbursed $750 million in loans of between $10 and $300 in the last five years, its East Africa growth manager Ivan Mbowa said.While total lending by banks grew 5 percent to 2.5 trillion shillings in the year ending June 2018, nonperforming loans climbed 27 percent to 298 billion shillings, according to the central bank.
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