Monday, July 20, 2020 – The Central Bank of Kenya (CBK) will soon have the powers to regulate monthly interest charged by digital mobile lenders once the proposed changes in the Central Bank of Kenya (Amendment) Bill 2020 are adopted by Parliament.
This will be a welcome relief to Kenyans who have suffered in the hands of rogue and exploitative digital lenders.
Once adopted by Parliament, the new law will enable the regulator to approve increases in digital lenders’ rates and other loan charges as well put a limit on non-performing loans at not more than twice the defaulted credit.
“The principal objective of this Bill is to amend the Central Bank of Kenya Act to regulate the conduct of providers of digital financial products and services. CBK will have an obligation to ensure that there is fair and non-discriminatory marketplace access to credit,” reads a notice in part.
In April, the Central Bank of Kenya (CBK) banned digital mobile lenders from accessing Credit Reference Bureau (CRB) services which saw several mobile apps suspend operations in the country.
The withdrawal was in response to widespread public outcry over misuse of the Credit Information Sharing System (CIS) by the unregulated digital and credit-only lenders.
In a recent interview, the CBK boss said they are tightening the amendments to curb emerging issues, including concerns of money laundering by the digital lenders.
“We have more than 100 digital lenders and we don’t know the source of their money.”
“Some of them could be laundering money and that is why we want to regulate them.” Dr. Njoroge said.
“We have been working on the amendments and we will regulate these entities the right way.”
“They won’t be regulated like big banks but customers should expect to be treated with dignity,” he added.
The Kenyan DAILY POST