Kenyans have reacted angrily to the reports which have appeared online that the recently merged NIC Bank and Kenyatta family-owned Commercial Bank of Africa entity NCBA are demanding the controversial Huduma Number from those operating and willing to open bank accounts with them.
Have been a CBA (now NCBA) Loop user for a while now. The product, which targets young people, and has an unquestionably one of the best mobile banking apps in Kenya is good but has limitations, such as its inability to accept cheques. The concern has been raised by a lot of users including yours truly, which made me take a walk to an NCBA branch in town for a new account.
Without any law to back the demands, the controversial Huduma Number which is believed to be a key component to have the Kenyatta family manipulate the upcoming elections and force a leadership which will not be popularly elected on Kenyans.
While I do not love the idea of bunching several cards in my wallet because I’m an ordinary, struggling Kenyan who just needs access to basics, I was surprised to note some interesting things on the account’s application form. To begin with, financial institutions are asking for way too much personal details, which is not something that was not the case when I opened my first student’s account back in 2010.
Secondly, and perhaps the most controversial concern was a slot for a Huduma Numba, which, technically, is not here yet. The new identification number, which has since brought widespread confusion, was sold as a single identification system under the NIIMs database.
Of course, you are supposed to leave the space blank as advised by the bank agent, but you can bet that soon it will be mandatory to present the ID in future services, including those offered by the government unless something changes.
Before the current uproar, then CBA was accused of using the Huduma Number details to mine data from Kenyans for private business endeavours, a move seen as going ainst the law and need for respect for data privacy.
We understand that the interest rate will vary depending on the credit risk of each entity or individual. That makes a strange and bizarre scenario as to who would come up with such pricing. Remember that banks lend against customer deposits, which is just basic banking. So how then will these “cheap loans” be provided for in case of substantial default?
Of course, the government will cover these risks at the taxpayers’ expense. There will be a budget allocation for defaulters since all bad loans have to be provided for.
The government announced that there would be a second registration of Kenyans through a system known as the National Digital Registry System (NDRS), a system which has already been hijacked by the now named NCBA.
So, participating banks will reap profits while credit-risk borrowers will bear the pain of repaying disbursements at higher interest rates unlike those who are less risky. Remember that banks never jump in on anything unless they are getting a sweet deal out of it.