Mobile loan Apps have six months to acquire new licenses or risk closure of operations, the Central Bank of Kenya (CBK) has notified.
Governor of the Central Bank of Kenya, Dr. Patrick Njoroge, told the media on Tuesday, March 15, that the decision is in line with newly created regulations.
He went on to say that the action is intended at taming uncontrolled digital lenders, who have soiled the sector’s image.
“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 President Uhuru Kenyatta signed into law in December 2021, aims to provide the CBK authority to oversee all digital lenders.
This means that, unlike prior restrictions, all mobile loan apps-lenders would be obliged by law to apply for new licenses rather than just registering to begin business. The new rules are expected to be published before the end of the month.
The CBK is taking steps to control digital lenders that have been accused of using unusual and excessive credit collecting practices, including exchanging personal information with other parties.