Digital Lenders Under Scrutiny By Central Bank of Kenya and Office of The Data Protection Commission Over Malpractices

A lot has been going on lately around digital lending apps or loan apps as many call it in Kenya. In a move to regulate this sector, Central Bank of Kenya(CBK) have listed requirements they need digital lenders to provide in order to be licensed.

Players in the digital lending business had until September 2022 to submit these requirements for approval.

By mid September 2022, Central bank of Kenya had approved only 10 digital lenders out of 288 applications they received. They said the process is ongoing and will update the public once more lenders are approved.

List of Approved Digital Lenders in Kenya

  1. Ceres Tech Limited
  2. Getcash Capital Limited
  3. Giando Africa Limited (Trading as Flash Credit Africa)
  4. Jijenge Credit Limited
  5. Kweli Smart Solutions Limited
  6. Mwanzo Credit Limited
  7. MyWagepay Limited
  8. Rewot Ciro Limited
  9. Sevi Innovation Limited
  10. Sokohela Limited

You can find full details of these digital lenders including their contacts and location here.

While the process of regulation by Central Bank is ongoing, the Office of the Data Protection Commission (ODPC) in a notice dated 5th October 2022 said they are auditing 40 digital lenders whose practices regarding the processing of personal data has been raised to the data commission as complaints by various members of the public.

Public Notice from the ODP

It’s important to note here that Data Protection (Complaints Handling and Enforcement Procedures) regulations 2021 took effect on February 2022.

With new regulations in progress, digital lenders still have a long way to go.

On the other hand, opportunities in the digital lending space is still huge.

Overview of Digital Lending Services in Kenya

So, will the regulation by Central Bank of Kenya and ODPC help protect customers from Exploitation? Yes, definitely.

To be honest, there is a lot of unethical business practices by mobile app lenders. This going by the ratings and reviews left by customers on the google play store on each of the listed apps.

The most popular unethical practice by loan apps is them calling customers several times a day and sending them many threatening messages even before the loan deadline is due.

This takes me to the big question which is, why did it take CBK so long for them to move and regulate the digital lenders?

Were they speculating first on how they operate then proceed to regulate them in order to protect the public from exploitation?

Well, this might be true. But let’s wait and see actions that will be taken against unscrupulous operators in this market space.

What Central Bank Want Digital Lenders To Do

While announcing their move to regulate digital lenders serving customers in the Kenyan Market, Central Bank of Kenya listed a number of key things they need digital lenders to adhere to when issuing credit/loan. This was gazetted in a special issue of Kenya Gazette supplementary No.45. Among these key things are;

  1. Provision of credit – A digital credit provider may set borrower limits in its credit policy and the limits shall comply with any requirements prescribed by the Central Bank.
  2. Credit Collection -A digital credit provider, it’s officers, employees or agents shall not in the course of debt collection engage in any of the following conduct against the customer or any other person:—
    • Use of threat, or violence or other criminal means to physically harm the person, or his reputation or property;
    • Use of obscene or profane language;
    • Make unauthorized or unsolicited calls or messages to a customer’s contacts;
    • Improper or unconscionable debt collection tactic, method or conduct.
    • Any other conduct whose consequence is to harass, oppress, or abuse any person in connection with the collection of a debt.

Take time to real all the regulations here.

Do you think regulations by central bank will help protect Kenyans from preying digital lenders? Let me know in the comments section below.

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Until next time, bye bye and take care.

Follow me on twitter @cheptiony.

Cheptiony Mutai

Cheptiony Mutai is the founder and author of this blog. By profession, he is video producer and an online entrepreneur working and living in Kenya.

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1 Response

  1. October 25, 2022

    […] Central Bank of Kenya and Office of the Data Protection Commission is on their case in a bid to regulate […]

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