Uber driver Michael Muturi in Kenya’s capital Nairobi has the chance to buy a car that would normally be out of reach thanks to a new bank loan program that uses data from the ride-hailing app to assess risk, Reuters reported.

“I felt like I won a jackpot,” said Muturi, who received an Uber message this month telling him his profile was good enough to apply for a car loan. “With my own car I will be able to afford a good house, take my kids to a good school and save for the future.”

Kenya’s Sidian Bank has approved at least 10 car loans for experienced Uber drivers using a model Uber hopes to roll out across Africa, where poor customer data limits lending, Reuters reported.

Getting loans is a major challenge for people and small business owners in Africa. Few people have bank accounts or a credit score and this prevents lenders from assessing risk.

Sidian’s financing is focused more on the applicant’s proven Uber experience than on his or her credit history, the bank CEO said, according to Mail&Guardian. “We expect speedy uptake of this financing package, with the entrenchment of Uber’s services in Kenya.”

Uber’s app is a way for Uber drivers to accumulate data. The app registers customer satisfaction and provides the bank with data it needs to decide whether to offer Uber drivers relatively cheap loans to buy their own cars.

Source

From MoneyWeb. Story by Unathi Sonwabile Henama, tourism lecturer at South Africa’s Tshwane University of Technology.

South Africa has strong political, economic, cultural and social ties with its former colonizer, the U.K.

The financial markets suffered in the aftermath of the historic referendum to leave the European Union. Brexit has implications for the South African economy, and South Africa must focus on what it can control.

South Africa has been experiencing a currency crisis with the rand losing value against major currencies. This has hurt economic growth. South Africa is likely to enter a recession as the economy won’t grow more than 1 percent this year.

South Africa imports more than it exports, and this has led to a huge trade deficit as a percentage of GDP. The economy depends on foreign direct investment to drive growth, in line with the country’s export-led economic policy. The economy is also suffering from job shedding in mining as commodities prices have plummeted, and labor costs have increased, increasing the cost of doing business. The rand’s weakness has increased the cost of living.

The rand’s value loss means that South Africa becomes much more attractive as a value-for-money destination. Tourism is an export product that is consumed at the destination, because it is a service that is simultaneously produced and consumed. This means that the majority of value addition can happen within the country, in contrast to exporting raw materials and importing the final product — so prevalent in the mining sector.

Source