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Home » Daily Briefing » Daily briefing - 18 January 2019

Daily briefing - 18 January 2019

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Bob Collymore, chief executive of Safaricom

Safaricom is becoming a serious digital lender with the recent launch of its new service Fuliza, which it operates with bank partners KCB and CBA. The service began on 7 January, and has exceeded expectations, according to Safaricom chief executive Bob Collymore. "We got a million (customers) by day eight and by day eight we had lent US$10 million. Now we are probably at US$15 million," CEO Bob Collymore told Reuters in an interview. Yet Safaricom's dominance in the field is causing its own problems. The telco falls under the regulation of the Communications Authority which is looking at "Safaricom's ability to set its retail prices, curb its marketing expenditure and force it to share its extensive infrastructure with the other operators, to level the playing field". In Tanzania, which also has a big mobile money market, regulators learned from the Kenyan experience and forced telcos to offer interoperable services, to prevent one business from seizing the market.

Irish commentator Fintan O'Toole has been pointing out the obvious about Brexit for two years: it's really about the self-inflicted sundering of the United Kingdom. "It is becoming ever clearer that Brexit is not about its ostensible subject: Britain's relationship with the EU. The very word Brexit contains a literally unspoken truth. It does not include or even allude to Europe. It is British exit that is the point, not what it is exiting from. The tautologous slogan Leave Means Leave is similarly (if unintentionally) honest: the meaning is in the leaving, not in what is being left or how." In reality there is only one option left, which is an exit with no deal. Much of this slow, invisible collapse is far from mysterious, says O'Toole.

It was Frances Coppola who noted recently that European voters angry about the bank bailouts would have been even more angry if a bank bailout had not happened. Events in early 2019 in Europe suggest that efforts to embed financial rules across the continent ignore the realities of European politics in this febrile age of Brexit and rising populism. Italy's Five Star Movement and League came to power in part because of their anti-bank rhetoric. Now the prospect of angry and out-of-pocket depositors has encouraged the government to take care of retail bond investors, which make up an unusually large market in Italy. The ECB is ignoring Italy's breach of the new European rules on bailouts. This follows the curious decision this week of Santander to ditch putative chief executive Andrea Orcel, with some suggesting that in the current political climate, there's not much appetite among Spaniards for paying $50 million to a banker.

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