There are Only 22 Licensed Digital Credit Providers as of January 2023, Says Central Bank of Kenya

The Central Bank of Kenya has announced the licensing of 12 more applicants to offer digital lending services in Kenya.

The 12, that include Pezesha, are classified as Digital Credit Providers (DCPs) and brings to 22 the total number of licensed applicants since September 2022 when the first batch of applicants were approved.

Press Release: Licensing of Digital Credit Providers – January 2023https://t.co/V9PWGg5m8Tpic.twitter.com/t5ryzGqcqx

— Central Bank of Kenya (@CBKKenya) January 30, 2023

“CBK has received 381 applications since March 2022 and has worked closely with the applicants in reviewing their applications. Additionally, CBK has engaged other regulators and agencies pertinent to the licensing process, including the Office of the Data Protection Commissioner,” the bank said.

The new list includes:

• Jijenge Credit Limited
• Jumo Kenya Limited
• Letshego Kenya Ltd
• MFS Technologies Limited
• M-Kopa Loan Kenya Limited
• Inventure Mobile Limited (Trading as Tala)
• Natal Tech Company Limited
• Ngao Credit Limited
• Pezesha Africa Limited
• Tenakata Enterprises Limited
• Umoja Fanisi Limited
• Zanifu Limited

The CBK got the mandate to regulate and oversee the lending sector through legislative amendments to the Central Bank of Kenya (CBK) Act which came into effect in December 2021. In March 2022, the bank published fresh regulations requiring all digital lenders to apply for licenses within 6 months.

Under the new regulations, providers are expected to comply with several expectations including:

• Lenders will not use obscene or profane language with the customer or the customer’s contacts for purposes of shaming them
• Lenders will not use threats, violence, or other means to harm a customer, or his reputation or property, if they do not settle their loans
• Lenders are barred from posting a customer’s personal or sensitive information online or on any other forum or medium for purposes of shaming them
• Lenders will not engage in any other conduct whose consequence is to harass, oppress, or abuse any person in connection with the collection of a debt

Failure to comply with the above regulations will incur a monetary penalty on a digital credit provider in an amount not exceeding KES 500,000 (Appromately $4,372).

The regulation came following concerns from the public about poor practices from digital lenders. Some of the practices that irked Kenyans include:

• High-interest rates
• Over-indebtedness
• Unethical collection practices
• Personal data abuse

“Other applicants are at different stages in the 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 applications,” the bank says.

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