Parliament Invites The Public To Give Views On Regulation Of Digital Lenders

The National Assembly has invited Kenyans to submit their memoranda on the bill that seeks to amend the Central Bank of Kenya Act to provide for the licensing of digital credit service providers who are currently not regulated under any law.

Article 118 (1)(b) of the Constitution of Kenya provides that “Parliament shall facilitate public participation and involvement in the legislative and other business of Parliament and its committees.”

At the same time, the Standing Order (S.O.) 127(3) provides that “the Departmental Committee to which a Bill is committed shall facilitate public participation and take into account the views and recommendations of the public when the Committee makes its report to the House.”

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The Bill was re-introduced to the House by the Chairperson of the Departmental Committee on Finance and National Planning Gladys Wanga. The Bill seeks to have the CBK regulate mobile lenders in Kenya who have been accused of operating without following the rules.

“This legislation arises from the need to ensure fair and non-discriminatory marketplace for access to credit through a legal framework to regulate digital borrowing platforms,” said the National Assembly in a notice to the public.

Read More: We Not Against Regulation By CBK – Digital Lenders

The Bill has already been presented and has gone through the First Reading in the National Assembly. Kenyans have been given until Friday, 28^th May 2021, to submit their views by 5 pm.

The Digital Lenders Association of Kenya (DLAK) has said that its members are not against the regulation of the sector. The Association said that it has never been against being regulated because it is only through rules and laws that order is achieved.

“We welcome regulation because it is a sign that the market is maturing. We are not against the regulations as some people might think,” said Mr. Kevin Mutiso from the Digital Lenders Association of Kenya.

According to Mr. Mutiso, the coming of Covid-19 hit the digital lending sector hard. “At some point, we were almost lending zero to our customers but the sector has started picking up.” In 2020, digital lenders gave out 4,000,000 loans at an average of 4000 shillings.

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“Financial literacy is is about making money an asset and not a danger for the customer. It is about empowering our customers and not burdening them,” said Mr. Ivan Mbowa, the General Manager at Tala Kenya.

“Within Tala app, we have created a financial literacy information where customers can see how other borrowers are getting financial assistance and how they are empowering themselves,” added Ivan Mbowa.