Perpetual Debt in the Silicon Savannah

Perpetual Debt in the Silicon Savannah

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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.


Mobile lending has led to chronic and repressive personal debt in Kenya.

Kenya offers a prime example of economic development through digital finance - the country is known as the “Silicon Savannah.” The widespread adoption of mobile phones has made online lending popular; an individual can obtain funds from fintech service providers through mobile apps. Early on, easy access to credit promised to expand financial inclusion in a nation with a great number of unbanked citizens, but while loans in small amounts are readily available, they come with hefty fees. As costs accumulate, people struggle to repay their borrowings. They often have to take&#...

About the Authors

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