The Central Bank of Kenya (CBK) has added 29 more digital credit providers (DCPs) to its register, taking the number of regulated lenders in the sector to 281.
In a press release dated September 30, the CBK said the approvals were made under Section 59(2) of the CBK Act. It added that the licensing process is meant to keep lenders within the law and protect people who borrow through digital channels.
The latest batch follows 25 licences issued in July. Since March 2022, the regulator says, it has received more than 900 applications from firms hoping to join the sector.
Each application is checked for the applicant’s business model, its consumer protection safeguards, and whether its proposed shareholders, directors and managers are fit for the role.
Some applicants are still in the pipeline, and many have yet to send in documents the CBK asked for. The bank has urged them to “submit the pending documentation expeditiously” so their reviews can be wrapped up.
Licensed DCPs lend mainly through digital platforms, including USSD codes. Their offerings cover education and development loans, short-term personal credit, asset financing and business loans.
As of August, they had disbursed 9,596,509 loans worth a combined Ksh165.1 billion, according to the CBK.
The push to license more lenders comes amid growing worry about unregulated operators, who have been accused of charging steep rates, using aggressive and unethical debt collection tactics, and misusing customers’ personal data. The CBK has asked the public to report such lenders.
The legal risk of operating without a licence was underlined in July, when a Small Claims Court ruled that an unlicensed lender could not enforce its lending claims.
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