Thursday Ideas 🚀 – The lending part is never hard, getting back the money has and will always be the tough bit of this not so symbiotic equation.

“Kukopa harusi, kulipa matanga.”

This is a Kiswahili saying that would loosely translate to, “borrowing is easy and joyous as a wedding occasion, paying back the debt is hard and as sad as a funeral.”

We have all had to lend someone money, whether it be Ksh.200 or 750 or 8,000 or more.

The lending part is never hard, getting back the money has and will always be the tough bit of this not so symbiotic equation. You have to follow up, send numerous texts, make calls, beg and sometimes even threaten this person who said that they would pay back the money on time as initially agreed, only to go MIA.

Rule of thumb is that if someone says they’ll pay you back tomorrow, you know that’s a lie and if you choose to go ahead and give out the money, do not expect it back.

I don’t even have to expound too much on this because at some point in our lives we have all had to deal with a debt defaulter, be it a friend, relative or an acquaintance.

Chances are we have also been defaulters in one way or another.

So what is a possible solution for this debt defaulter mega-issue?

In Kenya, a possible solution could be a standing order agreement when you lend money to someone via M-pesa.

How?

Let’s call this M-pesa product “Kakitu”. It would similarly to Fuliza but now, between peers (peer to peer). When lending out money, you would use this “Kakitu” product, instead of sending out money directly to the phone number as you would do normally, you would use this product via USSD or the M-pesa app.

On this product you would include the phone number that you are sending money to and the expected date of pay back, this would be like a virtual contract.

If the money is not paid back on the agreed upon date, the contract would be activated and anytime the debtor receives money in their M-pesa, a percentage or the full amount would automatically be deducted and sent directly to the M-pesa account of the lender to repay back the debt. Just like Fuliza but for people.

The company offering this service could make revenue by taking a small cut for facilitating this service.

M-pesa, Airtel Money and banks offering peer to peer fintech services, what to do you say?

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