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Perpetual Debt in the Silicon Savannah
Article

Perpetual Debt in the Silicon Savannah


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Editorial Rating

7

Qualities

  • Eye Opening
  • Overview
  • Background

Recommendation

Fintech has brought many conveniences to modern life, but it also has created new hazards for users. In this eye-opening exposé, social scientists Kevin P. Donovan and Emma Park look at Kenya’s issues with widespread personal debt arising from mobile lending apps. They report on fintech operations in the country, noting how local laws and socioeconomic factors have influenced these firms’ business practices. The authors argue, quite persuasively, that poverty and instability are the primary causes of individuals’ debt crises, along with a lack of industry regulation and supervision.

Take-Aways

  • Mobile lending has led to chronic and repressive personal debt in Kenya.
  • Poverty is at the root of the debt problem.
  • Fintech companies in Kenya are subject to lax banking and privacy regulations.

About the Authors

Kevin P. Donovan and Emma Park are doctoral candidates at the University of Michigan.