Future of 259 digital lenders uncertain as CBK delays approval

Tuesday, January 31st, 2023 06:10 | By
Future of 259 digital lenders uncertain as CBK delays approval
Future of 259 digital lenders uncertain as CBK delays approval

MARKET: The future of 259 digital credit providers (DCPs) hangs in the balance after the Central Bank of Kenya (CBK) announced it had approved an additional 12 firms to operate in the lucrative market.

This brings the total number of licensed firms so far to 22 following the approval of 10 digital lenders announced in September last year.

Central Bank said in a statement issued yesterday that it has received a total of 381 applications since March last year and has worked closely with the applicants in reviewing their applications.

Business models

Additionally, it said it has engaged other regulators and agencies pertinent to the licensing process, including the Office of the Data Protection Commissioner. “The focus of the engagements has been inter alia on business models, consumer protection, and fitness and propriety of proposed shareholders, directors and management,” CBK said.

“This is to ensure adherence to the relevant laws and importantly that the interests of customers are safeguarded.”

According to CBK, the licensing and oversight of DCPs as indicated previously 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.

The firms so far approved by CBK are Ceres Tech Ltd, Getcash Capital Ltd, Giando Africa Ltd, Jijenge Credit Limited, Kweli Smart Solutions Limited, Inventure Mobile Limited, Jumo Kenya Limited, Letshego Kenya Ltd, MFS Technologies Limited, M-Kopa Loan Kenya Limited, and Mwanzo Credit Limited are just a few of the licensed DCPs.

Also approved were My credit Limited, My Wagepay Limited, Natal Tech Company Limited, Ngao Credit Limited, Pezesha Africa Limited, Rewot Ciro Limited, Sevi Innovation Limited, Sokohela Limited, Tenakata Enterprises Limited, Umoja Fanisi Limited and Zanifu Limited.

The CBK Act 2021 which was assented into law by retired President Uhuru Kenyatta on December 7 last year will see the growing online lending sectors seek approval from the Central Bank for the pricing of their loans bringing them under the same rules as commercial banks.

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