Digital Lenders To Apply For New Licences By September

[Photo: The Star]

The Central Bank of Kenya (CBK) says all digital lenders have up to September 2022 to acquire new licenses from the Bank, before they are allowed to operate in the country.

This is in compliance with the new regulations that have been formulated, under the Digital Credit Providers Regulations, 2021.

CBK governor Patrick Njoroge says the new regulations are expected to be gazetted this month.

This is after President Uhuru Kenyatta last December approved a change in law that allowed CBK to regulate the digital lenders.

CBK also has power to revoke licences of firms which send information of loan defaulters to third parties with an aim of debt shaming.

“All previously unregulated Digital Credit Providers will be required to apply to CBK for a license by September 2022 or cease operations,” said Njoroge.

The lenders will also be required to disclose the total charges for their loans, including interest rates, late payment and rollover fees, before disbursing credit to customers.

“Arising issues of overpricing, misuse of customers’ data will be taken care of in the new law. Consumers will benefit as CBK will set minimum charges which will lower interests of the credit service offered,” noted the CBK governor.

This is as CBK notes that many Kenyans are not aware of their rights and do not read the terms of the loans when signing up for credit

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