Central Bank of Kenya Issues Only 10 Digital Lending Licenses Out of 288 Applications

The Central Bank of Kenya (CBK) has said the deadline to apply for licenses by digital credit providers has elapsed and all providers that were not licensed must stop operations.

In a press release, the CBK indicated that out of 288 applications, only 10 digital credit providers got approval.

The bank has published the 10 compliant firms below in its directory of digital lenders in the country:

• Ceres Tech Limited
• Getcash Capital Limited
• Giando Africa Limited (Trading as Flash Credit Africa)
• Kweli Smart Solutions Limited
• Mwanzo Credit Limited
• MyWagepay Limited
• Rewot Ciro Limited
• Sevi Innovation Limited
• Sokohela Limited

The CBK got the mandate to regulate and oversee the lending sector through legislative amendments to the Central Bank of Kenya (CBK) Act which came into effect in December 2021. In March 2022, the bank published fresh regulations requiring all digital lenders to apply for licenses within 6 months.

Under the new regulations, providers are expected to comply with several expectations including:

• Lenders will not use obscene or profane language with the customer or the customer’s contacts for purposes of shaming them
• Lenders will not use threats, violence, or other means to harm a customer, or his reputation or property, if they do not settle their loans
• Lenders are barred from posting a customer’s personal or sensitive information online or on any other forum or medium for purposes of shaming them
• Lenders will not engage in any other conduct whose consequence is to harass, oppress, or abuse any person in connection with the collection of a debt

Failure to comply with the above regulations will incur a monetary penalty on a digital credit provider in an amount not exceeding KES 500,000 (Appromately $4,372).

The regulation came following concerns from the public about poor practices from digital lenders Some of the practices that irked Kenyans include:

• High-interest rates
• Over-indebtedness
• Unethical collection practices
• Personal data abuse

In one of the more harrowing habits, Kenyans have complained of some lending apps using their phone contacts to reach out to family and friends asking a defaulter’s contacts to remind him or her to pay their loans.