Impact of Kenya’s crisis on p2p lending operations

The unrest after elections in Kenya might also to some degree impact operations of Kiva and MyC4 which are funding p2p loans in Kenya. As Jessica Jackley Flannery of Kiva reports operations of the local MFIs in Kenya have been interrupted:

The situation on the ground appears to vary widely from community to community. However, one consistent report is that business is not operating as usual; most MFI operations have been interrupted or stopped altogether in the last week, whether due to imminent danger in their region or the general disruption in daily life caused by turbulence elsewhere. Thankfully, as far as we know, none of our partner MFI staff have been hurt. Unfortunately, due to the magnitude of the situation, we anticipate that many entrepreneurs will have been displaced, hurt, or otherwise adversely affected.

Please be patient as this situation unfolds. We expect possible disruptions in our Kenya MFI partners’ operations as the staff on the ground recover.

On the local provider Growth Africa Capital writes from Nairobi, Kenya:

It probably hasn't escaped your attention that the Kenyan elections didn't go a smoothly as we had all hoped and has resulted in a lot of unrest, violence, destruction and even deaths.

As I type (noon, 2nd January) things are slowly getting back to normal in Nairobi. The situation is also improving in Mombasa, though we are yet to get the same good news from the central Rift Valley, Western and Nyanza provinces.

We should have a full overview in terms of the wether any of the opportunities funded via MyC4 has been affected by the unrest by Monday (7th January).

Once safe to do so, we will look at the areas in Nairobi affected by the unrest and wether affordable funding will make a difference in the affected people's lives in terms of re-establishing their businesses. So stay tuned for opportunities that will help get Kenya and its enterprising people back to normal – your investment may make a huge difference.

While the situation in Kenya is somewhat unclear, the crisis is already impacting Uganda's economy. MyC4 only recently started in Kenya. The majority of loans are to entrepreneurs in Uganda. 
Ronald Isabirye of the local provider in Kampala, Uganda about the consequences:

Kenya is the most viable land and sea gateway to the rest of the world for Uganda, Rwanda, Burundi, southern Sudan and parts of eastern DR Congo. A blockage of the transport system therefore renders these economies incapacitated.

The queuing and scrambling for fuel witnessed in Kampala and other parts of the country in the last 4 days is an iceberg of what could happen if neighbouring Kenya descends further into post-election violence.

Effect on business in Uganda

Business in Uganda has been greatly affected by the scarcity of petroleum products especially the transport sector. Many business owners including MyC4 borrowers have failed to perform as planned due to the fact that movement and distribution of goods and services is limited.

Effect on FED& CMC

Work at FED and CMC is still moving on however, due to the limited availability of Diesel which runs generators which supply electricity in Kampala, the city is currently affected by prolonged power cuts even during day time.

On the other hand, the transport challenge has also affected timely repayments by some borrowers who do not have access to public transport at all.

The normal movements by FED field agents to potential opportunities have also faced a challenge, but FED will continue to pursue this problem in the way that will avoid interruptions in the usual work progress.


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