Balancing Mobile Lending with Financial Education – Sarah Fitzgerald, MD, interviews Sadia Rajput at the Seamless EA Conference

Balancing Mobile Lending with Financial Education – Sarah Fitzgerald, MD, interviews Sadia Rajput at the Seamless EA Conference

With the rapid rise of FinTech companies and increased accessibility to online micro loans and financing, the mobile lending industry currently estimates there are…

  • seven million borrowers in Kenya…
  • procuring loans from more than 50 digital lenders…
  • with the average loan size being $40…
  • and interest rates up to 150 per cent.

Mobile lenders came into the sector to help the 40% of Kenyans who had been excluded from the formal financial services but what is the impact in reality?

  • Identity fraud and gambling are key challenges in micro-lending leading to reduced accuracy on customer KYC and high NPLs of more than 50%
  • Over Indebtedness is becoming more frequent – People who used Fuliza to repay their microfinance institution and digital lender loans on average made 3 Fuliza transactions towards clearing MFI loans
  • According to the FinAccess 2019 Survey, Kenyans seek advice from friends and family on financial matters further reiterating the importance of promoting of financial literacy to address the knowledge gap for consumer concerns – making sound financial advice accessible for all Kenyans.
  • In addition to this, the FinAccess 2019 Survey also provided insights that mobile users indicated having used mobile money for betting. Of those, 3.7 percent of individuals aged 18 to 25 years.
  • Credit uptake by digital loans has increased from 0.6% in 2006 to 8.3% in 2019, the second highest after shopkeeper credit
  • 76% of Kenyan youth are gamblers, 500,000 blacklisted on CRB: these youth are between the ages of 18 and 25 years.
  • Furthermore, they borrow from digital lenders to facilitate bet placements
  • Betting and gambling firms in Kenya received a whopping 200 billion shillings in revenues. Out of the 200 billion shillings, only 4 billion shillings were remitted as the tax. This means they made at least 196 billion shillings in profits.
  • 56 percent of those involved in gambling are from the lowest income category while the remaining 46 are from the middle-income category.
  • Data privacy issues: While borrowers generally “consent” to the use of their data for calculating loans, it is unlikely they will read the full terms and conditions and understand exactly what data about them and their phone use will be used by the lender.

Whilst attending the Seamless East Africa Conference in Nairobi in September, Managing Director, Sarah Fitzgerald had the opportunity to interview Sadia Rajput, Business Development Lead, for Patascore Limited; 

What prompted you to set up Patascore Limited?

Financial literacy is a keen interest of mine, stemming from when I worked in Branch Banking and interacted with customers daily regarding different financial products or general wealth management advice.  The lack of financial literacy was worrying, and as access to products became easier, I could see the situation would only get worse.  An idea sprung to mind of a directory which would give every customer all the products and advice online but making this a reality was a challenge.

I was given Simon Sinneks’ book “Start With Why” and finally defined my WHY;

My WHY was to be a bridge between where people are (low financial literacy) and where people need to be (financially informed).

I am a curious person, a lifelong learner, a fintech enthusiast, I am pro technology being a tool to solve problems and my heart has always resonated with being in Kenya and doing my part to make the Kenya of tomorrow, a bright future of tomorrow.

As I pursued my MBA, I found myself doing a lot of research on the mobile lending business Kenya. I wanted to highlight the Kenyan story of our progressiveness with mobile money and how truly, it was the answer to the underserved and the unbanked.

One day I was fortunate enough to be introduced to Hilda Moraa, an exceptional entrepreneur in the fintech space who graciously got to know me over a cup of coffee.  As we exchanged stories, I started to realise that I was finally where I was meant to be in order to carry out my purpose.

We were both passionate about technology, data and making a bold impact, and under her guidance, we defined how we could build something to bridge the gap between the financial literacy gap through creating Patascore.

So what exactly does Patascore offer?

Patascore is derived from (Pata + Score) to mean “Get Score”.  Patascore is a mobile platform that offers credit decisioning as a service and financial education to empower Kenyans.  We are looking to bring a fun approach to helping borrowers use credit as a wealth creation tool.

Patascore takes a different approach by first providing financial education to the borrower to ensure responsible borrowing for the long-term.

On the other side, education is also provided to the lenders to ensure responsible lending that is not harmful to the borrowers, sustained profitable lending and customer retention.

Talking to people at this conference, there seems to be a growing awareness that there is the need for better financial education.  What problem does Patascore address?

We have quickly realised that credit scoring is only one vehicle and we need to deliver national movement of youth empowerment through financial education in order to have a long term impact.

Underneath the iceberg are alarming statistics that highlight that there is a need for neutrality in the digital lending space in Kenya.  Following our data insights, we have identified the following key issues that could be as a function of poor/irresponsible borrowing behaviour and hence need for an inductive financial literacy in the market.

There are regulatory concerns:  Unlicensed and unregulated digital lenders have been put on notice as the government moves to protect consumers from predatory lenders and the rise in identity fraud.  All financial services and products will soon have a label of approval by the Central Bank of Kenya (CBK) to be able to guide users on which products to use.

Some of the statistics are quite alarming;

  • Market average default rate (NPL) in the digital lending space is as high +30%- 50%.
  • 7 million were negatively listed on Kenyan’s credit bureau as of May 2018. 400,000 of these listings were for a default on a loan of less than $2.
  • Lenders cannot measure the willingness of their borrowers to repay
  • Identities are at risk, both real and digital.

In particular, there is evidence of loan stacking (borrowing from multiple lenders and using the loan of previous lender to pay back successive lender) which is indicative of lack of financial awareness;

  • 39% of total MFI borrowers had evidence of loan stacking
  • Peer to Peer transfers represents the highest number of transactions that loan stackers make followed by betting and then airtime purchase
  • There are over 50+ mobile lenders and over 200+ mobile lending products in Kenya and only <10% of those who are of low-income bracket are able to access these loans. Therefore, there is an oversupply of credit – credit bubble that is not making an impact

So what have you done about it?

A lot. We came up with our own, contextualised curriculum, centered around four themes which encompass the real challenges and financial literacy gaps that we feel people are struggling with in Kenya, based on the data:

  • General financial tips around money management
  • Credit scores and the focus here is on positive ratings
  • Tenants of a good borrower
  • Purposeful use of loans

How are you teaching?

We want to deliver the content over the channels that a user wants to take in the knowledge and gamify the experience using technology.  We decided to use an alternative approach by creating content on social media – Instagram, Twitter, Facebook, YouTube, Blogs, creating an API (Application Programming Interface) for lenders to share our module on their apps, a chatbot that has a knowledge base of contextualised financial advice and creating conversations about money with young people between the ages of 18 – 24 at their campus.

The chatbot is of particular interest because it uses AI and machine learning to intelligently gather information about what kind of financial education topics people there is demand for.

We hope to be able to become a blueprint for other stakeholders who have financial literacy content to be able to share on our platform and reach millions of Kenyans.


Executives in Africa are passionate about having a positive and lasting impact on Africa.  If you are building an impact business in Africa, please get in touch with Sarah Fitzgerald, at  We are keen to support impact businesses, not only through the provision of the right leaders to help grow that business, but also by understanding your business and connecting you through our own networks.  We are stronger together.


For more information on Patascore, please connect directly with Sadia via LinkedIn at or visit

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