This archive report was first published on 6 January 2022.
As of January 6, 2022, digital credit providers in Kenya have barely two weeks left to register their details with the Central Bank of Kenya (CBK). The deadline for registration is January 21, 2022, following the assent by President Uhuru Kenyatta on the Central Bank of Kenya (Amendment) Act, 2021 on December 7, 2021.
The act established CBK as the regulatory body for previously unregulated digital credit providers, with the Central Bank handed powers to license and supervise the activities of the digital lenders. According to CBK, registration of digital credit providers “will facilitate smooth transition from an unregulated to a regulated environment.”
CBK has invited interested members of the public to provide comments on the draft Regulations that can be downloaded from the Central Bank of Kenya website. The public consultation period also ends on January 21, 2022.
CBK has highlighted the boom in Kenya’s mobile lending industry alongside widespread concerns on the practices of various digital lenders. The Central Bank noted that ‘’With the recent advances in technology and ongoing innovations, lending through digital channels, particularly mobile phones, has grown significantly in Kenya.’’ However, concerns have been raised by the public about the predatory practices of the unregulated digital credit providers, and in particular, their high cost, unethical debt collection practices, and the abuse of personal information.
Stakeholders including lobby groups for digital lenders are expected to contribute to the discussion on the proposed regulations which cover various aspects of their operations. The Regulations provide for inter alia the licensing, governance, and credit operations of Digital Credit Providers (DCPs). They further provide for consumer protection, credit information sharing, and elaborate on the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) obligations of DCPs.
