Kenya's digital lending landscape has witnessed a significant improvement in customer protection, with a 75 per cent decline in cases of harassment and debt shaming by lenders.

This positive development comes two years after the enactment of the Central Bank Amendment 2021, which empowered the Central Bank of Kenya (CBK) to take stricter action against lenders engaging in such practices.

The encouraging statistics were jointly attributed to robust measures implemented by the Office of the Data Protection Commissioner (ODPC) and the Digital Financial Services Association of Kenya (DFSAK).

Notably, the Central Bank Amendment 2021 granted the CBK the authority to revoke licenses of lenders who violate personal data confidentiality by aggressively pursuing defaulters.

During a Digital Credit Providers Breakfast Meeting held in Nairobi, Data Protection Commissioner General Immaculate Kassait expressed optimism over the figures, highlighting that they represent the most significant improvement in customer protection witnessed in the past two years.

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"The drastic decline in complaints against financial service providers is the highest we've seen since the Central Bank of Kenya introduced its regulatory framework," Kassit stated.

DFSAK chairman, Kevin Mutiso, echoed Kassait's sentiments, emphasizing the importance of collaboration in achieving positive outcomes.

"We've maintained a close working relationship with the ODPC to ensure robust customer protection," Mutiso remarked.

"This collaborative effort has resulted in a remarkable 74 per cent decrease in customer harassment. Debt shaming practices are practically eradicated, and any lenders who continue to harass customers will face severe consequences

Kenya stands as a frontrunner in the realm of digital lending, fueled by its high mobile phone penetration rate and a substantial unbanked population.

Statistics provided by the CBK reveal that 51 digital lenders currently hold licenses to operate within the country, with over 500 additional applications pending approval.

Furthermore, data from DFSAK indicates that Kenyan digital lenders cater to a customer base of 8 million individuals and disburse loans ranging from Sh10 billion to Sh15 billion on a monthly basis.

This burgeoning industry underscores the importance of effective regulation to ensure fair and ethical practices, ultimately fostering trust and sustainability in the digital financial ecosystem.