CENTRAL BANK OF KENYA ISSUES NEW RULES FOR DIGITAL LENDERS, GIVES SEPTEMBER DEADLINE TO APPLY FOR LICENSE

CENTRAL BANK OF KENYA ISSUES NEW RULES FOR DIGITAL LENDERS, GIVES SEPTEMBER DEADLINE TO APPLY FOR LICENSE

 



Central Bank Of Kenya Governor Patrick Njoroge

Kenya's Main Bank Said The New Regulation Complies With Sections 57(1), 57(3) And 57(4) Of The Central Bank Of Kenya Act (Central Bank Of Kuwait Act).

The regulatory framework will serve many purposes, including issuing licenses and overseeing the country's digital lending space.

Complaints about predatory lending and other hateful practices demonstrated by some digital lenders have called for the new rules.

The Central Bank of Kenya (CBK) yesterday informed digital lenders in the East African country that its new regulatory framework for digital credit providers has come into effect.


The 30-page regulatory document, published earlier this month and obtained by Business Insider Africa, introduces new rules and some sweeping changes aimed at sterilizing the Kenyan digital lending space. Among the new rules is that all previously unregistered digital lenders must meet the September deadline to obtain their licenses or risk closing.


Also, the new regulatory framework prohibits digital lenders in Kenya from sharing their customers' data with third parties, even when they are also required to obtain approval from Kenya's main bank before increasing interest rates. The Central Bank of Kuwait indicated that the need to regulate the banking sub-sector became necessary after numerous complaints of excessive lending and other abhorrent practices demonstrated by some loan holders.


“The regulations seek to address concerns raised by the public given the recent significant growth of digital lending particularly through mobile phones. These concerns relate to the predatory practices of previously unregulated digital credit providers, in particular, high cost and unethical debt collection practices, and the misuse of personal information.

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