👨🏿‍🚀 TechCabal Daily – South Africa’s new crypto clause

CRYPTO MARKET

Bitcoin	$23,093	+ 1.70%
Ether	$1,637	+ 0.34%
BNB	$321	+ 5.52%
Solana	$24.84	+ 1.01%
Name of the coin Price of the coin 24-hour percentage change		Source: CoinMarketCap

* Data as of 05:40 AM WAT, Janaury 24, 2023.

SEND BY FLUTTERWAVE

DELAYED CBK LICENCE THREATENS DIGITAL LENDERS

Digital lenders say that the Central Bank of Kenya (CBK) is taking too long to issue operational licences and that the delay is putting them in a precarious economic situation. 

ICYMI: Last year, the CBK mandated that all digital lenders register for a new licence under a newly enacted regulation that seeks to rein in the predatory lending and consumer privacy violations that had permeated the space. By September last year, the CBK had cleared only 10 lenders for fresh licensing, as directed by the regulator. These licensed lenders include CeresTech Limited, Getcash Capital Limited, Jijenge Credit Limited, and seven others. Other 278 digital lenders that applied were allowed to continue with their business as they await CBK’s response to their application.

They are still operating, so what’s the problem?

Since December 15, 2022, Google has refused to host loan apps that don’t have said CBK licences, and the CBK has not licensed any other digital lender aside from the aforementioned 10 lenders. 

This is costing the unlicensed digital lenders millions of customers—borrowers who are unable to download or get an update on their personal loan apps.

It’s not just interest on customers’ short-term loans that they are losing out on. Investors are also refusing to fund digital lenders who can’t prove their credibility with the CBK certification. 

Digital lenders, unlike banks and microfinance firms, do not accept deposits that are then lent to borrowers. Unless and until they acquire the CBK licences, their sceptical investors will not pump money into them, and they will run out of money and finally go out of business.

2AFRICA SUBMARINE CABLE LANDS IN SOUTH AFRICA

Another submarine cable is set to touch down Africa in key areas.

2Africa’s submarine cable has landed in South Africa, from where it will travel to other landing points in Africa and power advanced internet infrastructure on the continent. The cable, which landed in a Vodacom facility in Gqeberha, is the first of its kind in the Eastern Cape and is scheduled to begin full operations in 2024.

Sidebar: A submarine cable is a fibre optic cable that connects countries across the world, usually laid on the floor of oceans. They help to carry telecommunications signals across stretches of water bodies and connect to land-based stations.

The landing of the 2Africa cable comes with a promise for South Africans: quality and cheaper internet services, rural connectivity, and reduced latency. It will also create more local jobs and grow the South African economy—from $26.2 billion to $36.9 billion in three years, according to Vodacom’s press release. 

The project was executed by the 2Africa consortium, a collaboration of eight industry stakeholders including China Mobile International, Meta, MTN GlobalConnect, Orange, center3 (stc), Telecom Egypt, Vodafone/Vodacom, and the West Indian Ocean Cable Company (WIOCC).

Zoom Out: Internet experience in Africa is generally poor. The average data cost of 1GB in sub-Saharan Africa is around $6.4 dollars, owing to a lack of optimised internet infrastructure. Google’s Equiano cable is an earlier intervention to this problem. Running from Portugal to South Africa, the cable is touted to increase internet speed by a factor of six, create millions of jobs, and boost the GDPs of the African countries it lands in. 

GROW WITH PAYSTACK

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.

IN OTHER NEWS FROM TECHCABAL

The Next Wave: Africa needs to tell its own tech stories…just not the bad ones.