Central Bank of Kenya (CBK) Governor Kamau Thugge on Monday attributed the rising trend of Kenyans losing their hard-earned money saved in banks to the rise in digitisation.
Speaking before the Senate Finance Committee, Thugge acknowledged that the trend is a huge problem but revealed that CBK has moved in to stem the vice by putting in place legal and regulatory frameworks to reduce fraud risk.
The Governor was responding to questions raised by nominated Senator Tabitha Mutinda who sought to find out what the monetary policy regulator is doing to address the situation following numerous complaints raised by Kenyans who had lost their money.
Appearing before the lawmakers, Thugge emphasised that the frameworks being put in place by the banks will have robust systems with adequate internal controls to detect, prevent and mitigate the risk of fraud.
The lawmaker also addressed the issue of predatory lending by rogue players in the financial services industry indicating that CBK has put in place measures to arrest the issue.
"We are proactive to find out which entities are doing this kind of business without a license," he stated.
During the session, Thugge further revealed that only 32 digital lenders had been approved to operate in the country. This came even as Kenyans continued reporting cases of privacy violations and extortionate interest rates charged by some unregulated players.
In a statement, however, the lawmakers revealed that they were not fully satisfied with the responses given by the Governor and gave him 14 days to provide detailed responses.
"The Senate undertook to work in sync with the Governor to bring order in the microfinance and lending companies as well as the banks," read the statement in parts.
Cases of Kenyans losing money saved in banks or mobile money applications have left many frustrated leading to questions over lack or failure to enforce regulation.
Some of the culprits involved especially in mobile money fraud have been linked to a syndicate in the Mulot area of Bomet County.
However, despite some intermittent arrests, the cases are still rampant which has led to stakeholders calling on the government to track down responsible syndicates and put the culprits behind bars.
