The Central Bank of Kenya (CBK) has authorized ten mobile lenders, a process meant to reduce unruly behavior and runaway crime in the flourishing sector.
Kenyans have been crying foul over behaviors of some mobile lenders data breaches that saw them overzealously reach out to contacts of mobile lenders to compel them to step in and sometimes embarrass them for non-payment of loans, among other complaints
In a press release, CBK stated that at the end of the application period, they had received 288 applications, and those yet to be approved are still under review.
“CBK has received 288 applications since March 2022 and has worked closely with the applicants over the last six months in reviewing their applications. Additionally, CBK has engaged other regulators and agencies pertinent to the licensing process, including the Office of the Data Protection Commissioner. We acknowledge the efforts of the applicants and the support of other regulators and agencies in this process”, the statement read in part.
On March 21, 2022, the financial sector regulator announced the publication of the Central Bank of Kenya (Digital Credit Providers) Regulations, 2022 (the Regulations) on March 18. The Regulations were issued pursuant to Sections 57(1), 57(3) and 57(4) of the Central Bank of Kenya Act (the CBK Act).
They provide for the licensing and oversight of previously unregulated Digital Credit Providers (DCPs).
Consequently, all previously unregulated DCPs were required to apply to CBK for a license within six months of the publication of the Regulations, i.e., by September 17, 2022, or cease operations.
Registered mobile lenders or digital credit providers as the law calls them are;
- Ceres Tech Limited
- Getcash Capital Limited
- Giando Africa Limited (Trading as Flash Credit Africa)
- Jijenge Credit Limited
- Kweli Smart Solutions Limited
- Mwanzo Credit Limited
- MyWagepay Limited
- Rewot Ciro Limited
- Sevi Innovation Limited
- Sokohela Limited
In May this year, a report by the international association for mobile network operators GSMA showed that 36 percent of Kenyans acquired loans through their phones in 2021, the highest number globally.
“There is generally higher uptake of loans in markets with higher prevalence of mobile money, particularly Kenya (36 percent). India (18 percent) and Pakistan (16 percent) are the exception — although both countries have low to medium mobile money prevalence, uptake of loans is still relatively high,” the report read in part.
Some of the popular mobile lending platforms include M-Shwari, Tala, Fuliza, Branch, KCB M-Pesa and Zenka.
In the statement, CBK urged applicants to submit the pending documentation expeditiously to enable completion of the review of their applications. “All other unregulated DCPs that did not apply for licensing must cease and desist from conducting digital credit business”.