2018-2019 Faculty Fellow Emma Park recently published a piece in the Boston Review on “Perpetual Debt in the Silicon Savannah” with Kevin P. Donovan of the Centre of African Studies at the University of Edinburgh.
With overlap with the work of the Center’s Platform Economies Research Group, the article argues that Kenya’s poor were among the first to benefit from digital lending apps; now they call it slavery.
“Across conversations in Kenya’s pubs and WhatsApp groups, debt is on everyone’s mind. The speed and ease of access to credit through new mobile apps delivers cash to millions of Kenyans in need, but many struggle to repay. Despite their small size, the loans come with a big cost—sometimes as much as 100 percent annualized. As one Nairobian told us, these apps “give you money gently, and then they come for your neck.”
He is not alone in his assessment of “fintech,” the ballooning financial technology industry that provides loans through mobile apps. During our research, we heard these emergent regimes of indebtedness called “catastrophic,” a “crisis,” and a major “social problem.” Newspapers report that mobile lending underlays a wave of domestic disarray, violence, and even suicide. One young man in Meru described it as a “can of worries.” His monthly salary was not enough to cover ordinary expenses such as rent and necessary contributions to extended kin networks—let alone leisure or investments in his own future. So, like millions of others, he turned to phone-based loans, at one point toggling between five different apps. Reeling as the costs added up, he struggled to repay, deleting the apps so he would not be tempted by repeated offers of dangerous debt.
“Indeed Kenya’s new experience of debt is worrying. It reveals a novel, digitized form of slow violence that operates not so much through negotiated social relations, nor the threat of state enforcement, as through the accumulation of data, the commodification of reputation, and the instrumentalization of sociality.”
Emma Park and Kevin P. Donovan
Read the full article here.