The Central Bank of Kenya (CBK) announced the licensing of 19 additional Digital Credit Providers (DCPs), bringing the total number of licensed lenders to 51.

"The Central Bank of Kenya (CBK) announces the licensing of additional 19 Digital Credit Providers (DCPs). This is pursuant to Section 59(2) of the Central Bank of Kenya Act (CBK Act)," CBK announced.

This move comes amidst ongoing efforts to regulate the digital lending sector and protect consumers from predatory practices.

“The focus of the engagements has been inter alia on business models, consumer protection and fitness and propriety of proposed shareholders, directors, and management,” stated CBK.

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This rigorous vetting process ensures licensed DCPs adhere to relevant laws and prioritize customer interests.

The CBK has been actively reviewing a backlog of applications since March 2022. 

According to the bank, they have received a total of 480 applications and have collaborated with other regulatory bodies, such as the Office of the Data Protection Commissioner, to ensure a thorough review process.

“We acknowledge the efforts of the applicants and the support of other regulators and agencies in this process,” the CBK expressed its appreciation for the collaborative effort.

This licensing push follows concerns raised by the public regarding the practices of unregulated lenders.

Unlicensed DCPs were often criticized for their exorbitant interest rates, unethical debt collection tactics, and misuse of personal data.

The CBK is urging the remaining applicants to submit any outstanding documentation to expedite the application review process.

Additionally, they encourage the public to report any unregulated DCP.

This initiative by the CBK signifies a significant step towards bringing order to the digital lending landscape in Kenya.

By licensing responsible lenders and cracking down on unregulated practices, the CBK aims to create a safer and more ethical environment for borrowers.