The Central Bank of Kenya has put on notice mobile money lenders after it accused them of exploiting the public with exorbitant rates.
CBK through governor Patrick Njoroge also issued a warning to the digital lenders that were not registered.
“As the body which regulates commercial banks and deposits taking micro-finance institutions we will ensure that the merchants don't take advantage of Kenyans seeking quick loans,” Njoroge affirmed
Reports by Business Daily noted that the banking watchdog boss also called Kenyans to be on the lookout to avoid being duped by the unscrupulous operators who seem to exploit the consumer's ignorance.
Njoroge who was speaking In Kondele market during the launch of the governments ‘Stawi Loan’ stated that the CBK would follow up to ensure that the apps followed the interest caps introduced in 2016.
The Stawi mobile loan app is backed by five commercial banks and it targets the youth in small and medium sized enterprises.
The bank behind the Stawi loans are Kenya Commercial Bank, Commercial Bank of Africa, Diamond Trust Bank, Cooperative Bank and NIC.
President Uhuru Kenyatta and the banks held a series of meetings that concluded that the banks will now start extending loans charged at a rate of nine percent to the youth to help them venture into income-generating activities.
Prior to the agreement, banks had expressed concern over the inability of some youths in repaying loans extended to them forcing State House Spokesperson Kanze Dena to give assurance that a majority of young entrepreneurs were repaying the government loans they borrowed, therefore, a reduction in interest rates would be a major incentive.
