CBK Licenses Only 10 Out Of 288 Digital Lenders

By Jane Muia / Published September 19, 2022 | 11:57 am




KEY POINTS

The ten credit providers that have been approved so far include Ceres Tech Limited, Getcash Capital Limited, Giando Africa Limited, Jijenge Credit Limited, Kweli Smart Solutions Limited, Mwanzo Credit Limited, MyWagepay Limited, Rewot Ciro Limited, Sevi Innovation Limited, and Sokohela Limited.


Kenyan Shilling

The Central Bank of Kenya (CBK) on Monday said only 10 Digital Credit Providers have been licensed so far. According to CBK, the new directive is part of the laid conditions for fresh licensing of digital mobile lenders, which will help in remitting cases of loan overpricing and misuse of customers’ data.

In a press release dated September 19, the regulator disclosed that it has received 288 applications since March and has been working closely with the applicants over the last six months in reviewing their applications.

The ten credit providers that have been approved so far include Ceres Tech Limited, Getcash Capital Limited, Giando Africa Limited, Jijenge Credit Limited, Kweli Smart Solutions Limited, Mwanzo Credit Limited, MyWagepay Limited, Rewot Ciro Limited, Sevi Innovation Limited, and Sokohela Limited.

“Other applicants are at different stages in the process, largely awaiting the submission of requisite documentation. We urge these applicants to submit the pending documentation expeditiously to enable completion of the review of their application,” the press release reads in part.

CBK had given Digital Credit Providers (DCPs) until September 17 to obtain the new licenses. The regulator has now ordered DCPs that did not apply for the licenses to cease their operations.

The fresh licensing move came after customers raised the alarm on predatory practices of the unregulated DCPS. This included being pursued by the lenders in shameful ways like accessing their phonebooks and informing the defaulters’ friends and families via contact information.

The lenders have also been accused of hiding the full terms of their credits to customers leading to costly interest rates.

Some of the major players in digital lending include M-Shwari, Tala, Branch, and IMoney. CBK governor Patrick Njoroge said the Digital Credit Providers regulations seek to address public concerns and provide for consumer protection and credit information sharing.

Additionally, digital credit providers are required to put appropriate policies, procedures, and systems to ensure the confidentiality of customer information and transactions. Moreover, they shall not share customer information with any other person except with the customer’s consent.

The CBK act 2021 requires lenders to seek approval from the banking regulator to price their loans and products, subjecting them to the same rules as commercial banks. The law grants CBK powers to revoke permits of digital lenders who breach rules on confidentiality while pursuing defaulters.

CBK also barred digital credit providers from inviting or collecting deposits in any form, including the taking of cash collateral as security for loans, in carrying out digital credit business. Failure to honor this rule will attract suspension of licenses.

Related Content: Digital Lenders Have Nine Days to Get New Licenses






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