For most people, the hours between 3 and 5am are ungodly. But depending on one’s religious inclination, it can also be the time for morning glory.
For market women however this is the time they wake up and reach for their phones — to borrow money for that day’s business.
According to the Central Bank of Kenya, up to 30 per cent of the mobile phone loans that Kenyans borrow are taken up between 3 and 5am.
What’s more, most are repaid within 24 hours.
Intrigued by this “peculiar habit”, the CBK dug deeper into the statistic and found out that when the small-scale green grocer, also called Mama Mboga, wakes up at that hour, the first thing she does is borrow about Sh5,000 through her mobile phone.
She then sends some of the money to her wholesaler at Marikiti – the municipal wholesale market in Nairobi – to order her day’s supplies.
Apparently, the pattern is replicated in markets all over the country.
Once the Mama Mboga has placed her order, she then sends money to a handcart pusher who knows both the wholesaler and where to drop the supplies.
Mama Mboga will then attend to her household duties – preparing her family for work or school.
Once they are out of the house and she has had her breakfast, she then calls her regular motorbike rider, who picks her up at home and drops her off at her trading station.
She trades all day, and by evening, she repays the loan, only to begin the process again a few hours later.
It was not clear however, which lender they were borrowing from. All that was evident was that they were using their phones.
The reason that story that the CBK Governor Patrick Njoroge shared was so powerful is that it brings together several strands.
First, the role of women, and informal traders, which is often under-appreciated.
Practically all the food in Nairobi – 96 per cent according to Grant Brooke, the CEO of Twiga Foods – passes through the informal sector.
Even food that is consumed in high-end establishments will at some point in its journey have been carried on a mkokoteni (handcart), or sold through an informal wholesaler.
The bigger strand is how technology has revolutionised the financial sector.
It is not just about the ease of accessing money, as magical as that sometimes sounds. It is the fact that credit checks, disbursements and repayments can be done without any physical contact between the parties involved.
If the Mama Mboga had to travel to a bank branch or microfinance institution during working hours to transact, it would proportionally reduce the time she spent with her family or at the business.
Oftentimes, as well, the trader never meets her wholesaler, or transporter, in order to make her payments. It may sound small, but that is revolutionary.
There’s also a seemingly small, but crucial, element. While some take issue with the daily borrowing, rightly concluding that the trader is paying much more in interest to the lender, the fact that borrowers are able to build up a good credit history stands them in good stead in the long-term.
Some of traders are able to eventually borrow at better terms than many salaried workers, after they have built up a lengthy and detailed credit history.
As Ms Esther Macharia-Chibesa, a financier, commented on my Facebook page, “that’s one of the shortest credit cycles, it can be verified by analysis of behaviour patterns (no complex debt rating models using last year’s numbers), able to track real-time inflows (as she sells one can layer the cash inflow piece), and you can literally watch a business boom (or bust) just looking at 90 days, easily, of this Mama Mboga’s data”.
And that, then, is the story of the new 3 am. This is when business happens and the economy grows.