A bigger number of digital lenders in kenya might be out of the market in the next six months after Central Bank Of Kenya gazette new rules.
The lenders will have to get approval for their operations and their loan rates as well from the CBK. This is according to the Digital Credit Providers regulations, 2022.
“The regulations are now operational, all previously unregulated DVPs are required to apply to CBK for a license within six months of the publication of the regulation, I. e by September 17,2022 or stop the operations”, CBK said.
The digital lenders will not be sharing information of loan defaulters with the third parties as they have been doing inorder to shame and coerce defaulters into paying the loans.
CBK added that, the regulations provide for inter alia the licensing, governance, and lending practices of DCPs. They also provide for consumer protection, credit information sharing and outline the anti-money laundering and combating the financing of terrorism obligations of DCPs.
According to CBK, DCP shall not invite or collect deposits in any form, including the taking of cash collateral as security for loans, in the course of carrying out digital credit business.
Lenders will also not have the mandate of sharing negative credit information of a customer or any other person to CRB where the outstanding amount relating to the credit information does not exceed ksh1, 000.
Tge lenders will not be allowed to access into the customers phone book or any other phone records.
According to reports, the number of borrowers grew to more than 2 million as compared to 2016 where there were only 200,000 borrowers.
Lenders will also be required to reveal the sources of their funds used for business or proposed to be invested and also demonstrate that the funds are not proceeds of crime.
