The Central Bank of Kenya (CBK) has made significant strides in regulating the digital credit sector in the country by approving 12 new digital credit providers (DCPs) out of a total of 381 applications received since March 2022. This move aims to ensure that customers’ interests are protected and that the sector operates per relevant laws.
The 12 approved DCPs are Inventure Mobile Limited (Trading as Tala), Letshego Kenya Ltd, MFS Technologies Limited, Letshego Kenya Ltd, Natal Tech Company Limited, Ngao Credit Limited, Pezesha Africa Limited, Sevi Innovation Limited, Tenakata Enterprises Limited, Umoja Fanisi Limited, and Zanifu Limited. CBK is working with other regulators and agencies, such as the Office of the Data Protection Commissioner, in the licensing process to ensure that the interests of customers are safeguarded.
This move by CBK is part of a more considerable effort to regulate the digital credit sector, which had become a cause for concern due to predatory practices by unregulated DCPs. High-interest rates and unethical debt collection practices were among the main problems that prompted the need for regulation. With the new rules in place, CBK now has the power to suspend any DCP that breaches data confidentiality or charges exorbitant interest rates.
The Central Bank Amendment Bill 2021, assented to by former President Uhuru Kenyatta in December 2021, gave CBK the power to regulate non-deposit-taking credit providers. It has been a significant milestone in handling the digital credit sector in Kenya and protecting customers’ interests.
The approval of 12 new DCPs by CBK is a step in the right direction for regulating the digital credit sector in Kenya. The move aims to ensure that customers are protected from predatory practices and that the industry operates per relevant laws. With CBK’s efforts and the support of other regulators and agencies, the digital credit sector in Kenya is poised for a bright future.