CBK: Law to regulate digital lenders comes into effect today

for Tv47 Digital December 23, 2021, 08:15 AM
cbk governor patrick njoroge photocourtesy

The Central Bank of Kenya (Amendment) Act, 2021 has become effective today (Thursday, December 23).

This means that the Central Bank of Kenya (CBK) now has powers to regulate digital lenders, including the powers to license and oversight the previously unregulated digital credit providers.

With advancement in technology and innovations, lending through digital channels has grown significantly in Kenya.

Despite the growth in this sector, Kenyans raised concerns about the predatory practises of the unregulated digital credit providers.

Many Kenyans have been critical, for instance, of the high interest rates, 'unethical' debt collection practises, and what they say is the abuse of personal information.

With this amendment, CBK is now required to publish regulations within three months (by March 23, 2022).

"The regulations provide for inter alia the licensing, governance, and credit operations of Digital Credit Providers (DCPs). They further provide for consumer protection, credit information sharing, and elaborate on the Anti-Money Laundering and Combating the Financing of Terrorism (ami/cft) obligations of DCPs," says the CBK in a statement.

CBK is now inviting members of the public to provide comments on the draft regulations that can be downloaded from the Central Bank of Kenya website.

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