CBK Stops Unregulated Digital Lenders

The Central Bank of Kenya (CBK) has approved only 10 Digital Credit Providers (DCPs) out of 288 applications received.

CBK had earlier announced that all unregulated DCPs apply for a license by September 17, 2022, following concerns raised by the public about the predatory practices of the unregulated DCPs and in particular, their high cost, unethical debt collection practices and the abuse of personal information.

“So far, 10 applicants have now been licensed as DCPs pursuant to the CBK Act and the Regulations. Other applicants are at different stages in this process, largely awaiting the submission of requisite documentation. We urge these applicants to submit the pending documentation expeditiously to enable completion of the review of their applicants,” CBK said in a statement.

CBK has engaged other regulations and agencies pertinent to the licensing process, including the Office of the Data Protection Commissioner.

Following the elapse of the deadline, the apex bank ordered that all other unregulated DCPs that did not apply for licensing must cease and desist from conducting digital credit business.

The licensing and oversight of DCPs was precipitated by concerns raised by the public about the predatory practices of the unregulated DCPs and in particular, their high cost, unethical debt collection practices and the abuse of personal information.

Notably, well-known brands like Tala and Branch missed out on the initial list of approved DCPs.

In a statement to newsrooms, Tala said it had, “submitted its application for the requisite license in advance of CBK’s deadline of 17^th September 2022, and we are working with CBK regarding our application.”

Tala added, “We shall continue to operate as a digital credit provider pending issuance of our license by the CBK,”.

The CBK Amendment Act, 2021 and The CBK (Digital Credit Providers) Regulations, 2022 mandate CBK to license, regulate and supervise DCPs to ensure a fair and non-discriminatory marketplace for access to credit.

The digital lenders were previously only required to register the businesses to begin operations in the country.

Here is the list of approved DCPs

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