Law allowing CBK to regulate digital lenders takes effect

The law allowing the Central Bank of Kenya (CBK) to regulate digital lenders has come to effect.

President Uhuru Kenyatta assented to the CBK Amendment Act which confers CBK withthe power to supervise previously unregulated digital lenders.

With the Act coming to effect, the regulation gap that raised public outrcy has been removed.

Many Kenyans have decried pricing of digital loans and the adverse extent the digital lenders go in recovering money from load defaulters.

CBK noted there are cases of harrassment and unconventional practices the unregulated digital money lenders apply such as high interest rates, unethical debt collection procedures and mishandling of personal information.

“Concerns have been raised by the public about predatory practices of the unregulated digital credit providers, and in particular, their high cost, unethical debt collection practices, and abuse of personal information,” CBK said.

The proposed regulations will provide CBK with the power to license, govern and credit operation of digital lenders while providing consumer protection and credit information sharing.

The move is also aimed at curbing money laundering and terrorism funding through the digital lending platforms.

CBK will publish the regulations within three months of the law coming into effect in March 2022.

All the digital lending plaftorm ownwers will be required to furnish the CBK with their business details by January 21, 2022.

In line with the requirements of public participation, CBK has invited members of he public to provide their views and comments on the regulations.

“In line with public participation requirements, CBK invites interested members of the public to provide comments on the draft regulations, which can be downloaded from the CBK website,” CBK wrote.