kenya

Google clamps down on illegal loan apps in Kenya, Nigeria • ZebethMedia

By zebethcontrolPosted on November 18, 2022Posted in Fintech, kenya, Loan apps, NigeriaNo Comments

Google is requiring loan apps in Kenya to submit proof of license to operate in the country by its apex bank, failure to which they risk removal from Play Store, its digital distribution service. Those that have applied for licensing, and can produce evidence of the same, may also be spared. Google’s action has, however, been sluggish, coming two months after the Digital Credit Providers Regulations took effect to protect borrowers from rogue apps, many of which had predatory lending practices and used debt-shaming tactics to recover their money. New and old loan apps in Kenya are now expected to submit the requisite documents and information, or risk being locked out at the end of January next year. “Developers with personal loan apps targeting Kenyan users must complete [a] declaration form and submit the necessary documentation before publishing their personal loan app … Personal loan apps operating in Kenya without proper declaration and license attribution will be removed from the Play Store,” said Google in a policy update that also requires apps in Nigeria to get a “verifiable approval letter” from the Federal Competition and Consumer Protection Commission (FCCPC). While less stringent than Kenya’s new law, the FCCPC rules, which came into effect in August this year to protect borrowers, expects lending apps to declare their fees and demonstrate how they receive feedback and solve complaints, among other requirements. Kenya and Nigeria are major tech hubs in Africa, and have witnessed the proliferation of loan apps, offering quick unsecured personal loans of up to $500. However, the lack of stringent regulations has attracted rogue operators necessitating authorities to take apt measures to protect citizens. In Kenya, Only 10 of the 288 loan apps that applied for licenses from the country’s Central Bank have been permitted. Some of the popular ones, like Zenka and silicon-valley backed Tala are yet to be licensed. The digital lenders in Kenya are expected to avoid the use of threats or debt-shaming actions, including posting of personal information on online forums, unauthorized calls and messages to customers, and access to their contacts lists for purposes of contacting them in case of default. Loan apps collect borrowers’ phone data, including contacts, and demand access to messages to check the history of mobile money transactions — for credit scoring and as conditions for disbursing loans. Rogue lenders have been sharing some of the contact information collected with third-party debt collectors. Already, 40 loan apps in Kenya are under investigation by the office of the data protection commissioner over data breach, following complaints from users. The new law requires loan apps to also reveal their pricing model, terms and conditions to consumers in advance, unlike in the past when they were unsupervised. The apps are also expected to notify the regulator before introducing new products or making changes to existing ones, in addition to disclosing and providing evidence of their sources of funds.

Kenya’s Twiga dismisses in-house sales team, affecting 21% of it employees • ZebethMedia

By zebethcontrolPosted on November 16, 2022Posted in kenya, Startups, TwigaNo Comments

Kenya’s B2B e-commerce food distribution platform Twiga has laid off 211 of its full-time employees following restructuring that has eliminated the company’s in-house sales team. The laid-off staff make up 21% of the over 1,000 employees mainly in Kenya, where it links farmers or agricultural producers and fast-moving consumer goods manufactures to retailers. The agritech’s CEO and co-founder Peter Njonjo told ZebethMedia that the laid-off trade development representatives were given the option of working for the company as independent agents with pay based on the customers they acquire and sales they make. The representatives signed up vendors and were in charge of customer relations, gathering market intelligence and promoting products to clients. In the current proposition, the agents will carry out similar duties. Reports also state that Twiga has limited its staff travel allowances as part of its cost-cutting measures. “Twiga recently launched a new optimized sales agents’ program … where current Trade Development Representatives (TDRs) will transition from permanent employees into independent agents on a 100% commission basis,” said Twiga in response to a ZebethMedia inquiry, adding that the transition of the TDRs was made in line with labor laws and that impacted employees were granted the first right of refusal to transition to the new model. The company says it plans to create 1,000 opportunities through the agent model by the end of next year’s first quarter. “This transition creates an opportunity for entrepreneurship open to former sales agents and the general public. The benefit of this transition is that it allows for higher earnings based on the effort and enterprise of the agent. This model has worked with other businesses like insurance and banking that have transitioned fully into Independent Agents in Kenya.” Twiga, co-founded by Njonjo and Grant Brooke in 2014, joins the growing list of startups in Africa and across the globe downsizing amid a slowdown in VC funding, which has made capital for operations and growth hard to access. The changes come exactly a year after Twiga raised $50 million in series C round to scale in Kenya and expand to neighboring countries. The round was led by Paris- and Nairobi-based family office and private equity firm Creadev as TLcom Capital, IFC Ventures, DOB Equity and Goldman Sachs’ spinoff Juven made follow-on investments. They also recently launched Twiga Fresh, an addition to its private label through which it will farm and distribute its own agricultural produce to traders and to deal with traceability challenges, stock outs and price volatility — which have made it hard for the company to deliver on its promise of affordability and food security.

BasiGo to kick-off EV assembly in Kenya after $6.6M funding • ZebethMedia

By zebethcontrolPosted on November 15, 2022Posted in BasiGo, Climate, electric vehicles, kenya, TransportationNo Comments

BasiGo will begin assembling electric buses in Kenya from next month, ramping up its production of public transport vehicles (PSVs) as it targets to deliver 100 units by end of next year. The startup plans to deliver 15 of the 100 buses, manufactured using parts from China’s EV maker BYD Automotive, in January next year, having completed its six months pilot programme in the country’s capital, Nairobi. It also plans to expand its charging infrastructure network, with an initial focus on Nairobi, where its clients are mainly operational. The plans come against the backdrop of the new $6.6 million equity funding co-led by Novastar; an Africa-focused VC firm, Mobility54; the corporate venture capital arm of Toyota Tsusho, and Trucks.vc, a Silicon-Valley based vc firm that backs startups in the transport sector. This brings the total amount raised by BasiGo since its launch last year to $10.9 million. “As we prepare to deliver the next batch of e-buses to new, we are deploying the necessary charging infrastructure to support that expanded fleet. Currently, all of our customers are Nairobi public service vehicle operators and we are deploying charging infrastructure within the Nairobi area to support their operations. In the future, when we begin delivering to customers operating routes outside of Nairobi, we will expand the reach of our charging network beyond the city,” BasiGo CEO Jit Bhattacharya, who co-founded the startup with Jonathan Green (CFO), told ZebethMedia. To ensure adoption BasiGo’s Pay-As-You-Drive model makes it possible for bus owners to acquire the electric buses for a similar upfront cost of a diesel one”. The operators then pay a $0.17 subscription fee for every kilometer; a fee that covers the leasing of the e-bus battery, charging services and general vehicle maintenance; “In this respect, a BasiGo electric bus is always a higher return-on-investment for a bus owner compared to diesel buses. BasiGo’s K6 electric bus comes with an eight-year or 600,000-kilometer battery warranty direct from the manufacturer, BYD Automotive,” said Bhattacharya. The buses will come in 25 and 36-seater capacities, with a range of about 250 kilometers, which is enough to cover daily round trips. The buses are also a cheaper and cleaner alternative in Kenya’s public transport industry, currently dominated by fossil-fuel buses. There are about 20,000 diesel and petrol vehicles ferrying commuters across Nairobi, which are great contributors to the air-pollution that kills over 18,000 people every year in Kenya. BasiGo plans to supply over 1,000 mass transit electric buses to transport operators in Kenya over the next five years. “Over 90% of Kenya’s electricity already comes from renewables. Yet Kenya’s transport sector relies entirely on imported petroleum fuels. By electrifying Kenya’s public transport, we can make an immediate dent in climate emissions, clean up the air in our cities, and give bus owners relief from the rising cost of diesel. With this new funding, BasiGo is ready to bring the benefits of state-of-the-art electric transport to all people in Africa,” said Bhattacharya. BasiGo and its main competitor Opibus are the two EV startups in Kenya eyeing the mass transit sector. The launch of their buses follows plans by the government to roll-out Bus Rapid Transit (BRT) network, to be operated by green (electric, hybrid and biodiesel) vehicles, presenting a great business opportunity for EV players in the market.

Uber withdraws petition to annul new ride-hailing regulations in Kenya • ZebethMedia

By zebethcontrolPosted on November 4, 2022Posted in kenya, Transportation, UberNo Comments

Uber has applied to withdraw a petition in Kenya challenging the new ride-hailing regulations that capped commissions at 18%, and required taxi apps operating to acquire licenses. Coulson Harney, the law firm representing Uber, filed the notice of withdrawal bringing to an end its push to have the new digital ride-hailing regulations annulled. “Take notice that Uber B.V, the petitioner, gives notice and wholly withdraws its petition and the notice of motion application,” read the application, seen by ZebethMedia, and which came days after Uber lowered its commission from 25% and got a license to operate in Kenya. Estonia’s Bolt, Kenya’s Little and Rwanda-based Yego have also received approval to operate in the East Africa’s biggest economy. Uber confirmed to ZebethMedia that it had applied to withdraw the case, saying it remains committed to working closely with Kenya’s policymakers to help improve driver earnings, and ensure a great user experience. “On 03 November 2022, Uber filed an application to withdraw the constitutional petition on the new transport network regulations published by the Ministry of Transport in June. Having received a transport network license from the National Transport and Safety Authority (NTSA) has and considered several factors, we felt that the best course of action was to comply with the regulations, which includes the lowering of our service fee from 25% to 18%. We will continue to liaise with NTSA on the implementation of the regulations,” said an Uber spokesperson. The new law by Kenya’s Ministry of Transport and Infrastructure gives NTSA the mandate to enforce it. “We remain committed to Kenya and to creating economic opportunities for drivers and providing enhanced mobility for riders, as we have done since our launch in the market in 2015,” Uber said. Uber filed the petition in September this year urging Kenya’s high court to expunge the newly-implemented regulations, adding that some sections were unconstitutional, discriminatory, discouraging to foreign investments, and infringing on its rights and those of its riders and partners. Uber protested Kenya’s decision to cap commissions charged per ride, and plans to reevaluate pricing structures, saying the move would dent its earnings. It insisted that Kenya is a free market, where ride-hailing companies have the right to negotiate commercial agreements without external influence. It also claimed that the regulations were made and gazetted without following due process and public participation. The new law requires all platforms to have a physical presence in Kenya, and to obtain a license to operate. Uber had also faulted the condition that all ride-hailing companies must obtain a transport network license from NTSA to operate, saying that it was not a transport service but an app offering intermediation service. It said the regulations are discriminatory because only persons with Kenyan Personal Identification Numbers (PINs) were allowed to obtain the mandatory license. Ride-hailing companies in Kenya, including Bolt and Little, are also required to share drivers’ and riders’ data upon request by the authority. Uber said that this would be a contravention of the new Data Protection Act.

MoKo, Kenya’s home furniture startup, raises $6.5M • ZebethMedia

By zebethcontrolPosted on October 13, 2022Posted in Commerce, furniture, kenya, Moko, StartupsNo Comments

Kenya has the largest and most thriving furniture industry in East Africa, but the sector’s potential is hindered by several challenges among them production inefficiencies and quality concerns, forcing most major retailers to settle on imports. MoKo Home + Living, a Kenya-based home furniture manufacturer and omnichannel retailer, saw this gap and over several years set out to bridge it through quality and guarantees. The company is now eyeing its next phase of growth, following a $6.5 million series B debt-equity funding round, co-led by U.S based investment fund Talanton and Swiss investor AlphaMundi Group. Novastar Ventures, which co-led the firm’s Series A round, and Blink CV also made follow-on investments. Kenya’s Victoria Commercial Bank offered $3 million debt financing, $1 million of which is mezzanine financing – a debt that can be turned into equity. “We entered this market because we saw a real opportunity to guarantee and deliver quality furniture. We also wanted to bring convenience to customers, by making it easy for them to buy home furniture, the largest asset for most families in Kenya,” Eric Kouskalis, MoKo’s managing director, who co-founded the startup with Fiorenzo Conte, told ZebethMedia. MoKo was founded in 2014, initially as Watervale Investment Limited, an entity that sought to fix raw material supply issues for furniture manufacturers. However, in 2017 it pivoted and started a pilot for its first consumer product (a mattress), and then a year later launched the MoKo Home + Living brand to serve the mass market. The startup says it has grown five-fold over the last three years, and its products are currently in more than 370,000 homes in Kenya. It hopes to sell to millions of homes over the next few years, as it embarks on scaling up production and growing its product line. Among its current products is the popular MoKo mattress. “We plan to have an offering for each major piece of furniture in a typical home – bed frame, TV stand, coffee table, carpet. We are also developing even more affordable products in existing product categories – sofas and mattresses,” said Kouskalis. Digital-first brand MoKo is also planning to use the funding to grow its growth and presence in Kenya by tapping its online channels, building more partnerships with retailers and outlets to increase offline sales. It plans to also purchase more equipment. Already, MoKo is using digital technology in its production lines, having invested in “equipment that can take complex woodworking designs programmed by our engineers and execute them precisely in seconds.” This, they say, has helped the team to work efficiently and increase production. The “automated recycling technology and software that calculates optimal use of raw materials” has also helped them cut waste. “We were impressed by MoKo’s climate friendly local production capabilities. The company is a leading innovator in the industry because they’ve turned sustainability into a remarkable commercial advantage. Every step they’ve taken on this front not only protects the environment, it also improves the durability or affordability of MoKo’s offering to its customers,” said Miriam Atuya of the AlphaMundi Group. MoKo targets to enter three new markets by 2025 and to reach a wide pool of customers as furniture demand in the continent continues to grow, driven by population growth, urbanization and increasing purchasing power. “The potential for growth is what excites us the most. There’s still so much room to better serve millions of families in Kenya. That’s just the beginning – MoKo’s model is relevant for most markets in Africa, where families face similar obstacles in making comfortable, welcoming homes,” said Kouskalis.