The Central Bank of Kenya (CBK) has given mobile loan applications six months to acquire new licenses or risk closure of operations.
Speaking to the media on Tuesday, March 15, CBK Governor Dr. Patrick Njoroge, noted that the directive is in accordance with the new regulations that had been formulated.
He added that the move is aimed at taming the unregulated digital lenders, that have in a way tainted the image image of the sector.
“Regulations governing Digital Credit Providers will be gazetted later this month to pave way for the licensing and oversight of DCPs by CBK."
"All previously unregulated DCPs will be required to apply to CBK for a license by September 2022 or cease operations," the governor made the remarks while unveiling the National Payments Strategy 2022-2025.
Dr. Njoroge lauded the strategy- noting that it is a fast and secure system that benefits all Kenyans.
"(This is) A secure, fast, efficient and collaborative payments system that supports financial inclusion and innovations that benefit Kenyans. It's anchored on core principles of trust, security, usefulness, choice and innovation."
"No other country has put together a document that is as protective of the consumer as the National Payments Strategy. We require Payments Service Providers to put in place a working customer complaints system," he pointed out.
The Digital Credit Providers Regulations 2021, which was approved by President Uhuru Kenyatta in December 2021, seeks to give CBK powers in order to regulate all digital lenders.
This means that all mobile loan lenders will be required by law to apply for new licenses as opposed to the previous regulations whereby they only had to register to start operations. The new regulations are set to be gazetted before the end of this month.
CBK is moving to regulate digital lenders who have been accused of employing unconventional and extreme methods of credit collection, with some sharing personal information with third parties.
