👨🏿‍🚀 TechCabal Daily – Kenya’s new regulatory sandbox

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MTEK PARTNERS TO PROVIDE DIGITAL INSURANCE TO 100,000 TRADERS

mTek, a Kenyan insurtech company, believes that everyone needs insurance, including the small corner shops scattered across the country. 

Now, it has partnered with Kyosk.app and Fin Africa to make insurance a reality for 100,000 of these corner shops—or dukas, as they’re fondly called in Kenya. 

It’s nice doing business with you🤝

According to the partnership, Kyosk.app will facilitate a direct link to its network of 100,000 traders while Fin Africa will provide the financing for mTek’s tailored insurance product. Teamwork makes the insurance work, after all.

A collaboration that hits home

Kenya, like the rest of Africa, is reported to have a low insurance penetration—about 2.17%, according to public records. And, as it turns out, the same category of people who don’t have any form of insurance are exposed to some of the biggest risks threatening their lives and properties. 

A collaboration like this that provides a tailored, paperless, end-to-end insurance product for the under-insured informal sector—a sector that comfortably employs 80% of employed Kenyans—is a welcome development that could contribute to increased insurance penetration in the East African country.

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KENYA DRAFTS REGULATORY SANDBOX FOR FINTECH AND INNOVATORS

The Communications Authority of Kenya (CAK) has published a draft of the “Framework for Emerging Technologies Regulatory Sandbox” and is seeking feedback from the public by February 3, 2023.

What is the sandbox for?

The CAK has the responsibility of establishing and reviewing regulations that guide ICT and new technologies, but it has realised that current regulations cannot adequately cater for emerging technologies such as those in fintech, cybersecurity, and other sectors.

The sandbox is an evidence-based, controlled environment in which such fintech startups and other innovators can conduct live tests of new services and products that do not easily fit in the current regulatory framework. The Sandbox Framework aims to provide regulators with the understanding they need to encourage innovation, growth, and healthy competition in the ICT sector.

It’s not just regulators that will benefit from this sandbox

The sandbox framework can reduce delays that are due to regulatory uncertainty by one-third. By removing regulatory uncertainty, it can also increase access to financing, lead to more solutions potentially being introduced to the market, contain the impact of failure on consumers and the innovator, and provide incubatory acceleration for the startups.

Has this been tried before?

The Sandbox framework isn’t a novel idea. It has been adopted in several ways in African countries like Mauritius, Rwanda, Sierra Leone, and Mozambique. Even in Kenya, some regulatory authorities have embraced the use of regulatory sandboxes, specifically in the financial sector.

The CAK is inviting Kenyans who have comments on the proposed guidelines to send them via email to rpqm@ca.go.ke by February 3, 2023.

US SUES GOOGLE OVER AD TECH MONOPOLY

The US is accusing Google of playing monopoly the wrong way.

The US Department of Justice (DOJ) and eight states have sued Google over its alleged anticompetitive, exclusionary, and unlawful monopolisation of the digital advertising market. They are also calling for the divestment of the search giant’s ad technology business and the restoration of competition to digital advertising.

Monopoly is not illegal in the United States, but leveraging market dominance to squash competitors is. 

According to the DOJ, Google has been neutralising ad tech competitors through a series of acquisitions and using its dominance across the digital ad markets to force more publishers and advertisers to use its products while disrupting their ability to use competing products effectively. Apparently, this pattern of behaviour can be traced back to when Google purchased online advertising company, DoubleClick.

On the other hand, Google has repeatedly said that the digital ad business is robust and competitive, highlighting major competitors such as Meta, Amazon, and Microsoft. In a statement, Google wrote that the “DOJ is doubling down on a flawed argument that would slow innovation, raise advertising fees, and make it harder for thousands of small businesses and publishers to grow”. 

The DOJ, which was reportedly contemplating this lawsuit for years, doesn’t agree and states why with chronological evidence in this 153-page document. 

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EVENT: STATE OF TECH IN AFRICA Q4 2022

Join us on January 27, on a special edition of TechCabal Live. We’ll be launching “The State of Tech report”. The State of Tech Report is our flagship report that analyses quarterly data on acquisitions, expansions, product launches, and funding in Africa’s tech ecosystem. 

This edition looks at 2022 in retrospect and contains interesting patterns and trends to look out for this year. At the event, we will discuss actionable insights and findings from the report with you and share our perspectives on the outlook of Africa’s tech landscape. 

Click here to save a spot.