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Nineteen more companies are allowed to offer digital credit to Kenyans as the Central Bank of Kenya (CBK) issued licenses to them. With this digital credit providers (DCPs) have risen to 51, intensifying competition in this lucrative segment.
Nineteen more companies are allowed to offer digital credit to Kenyans as the Central Bank of Kenya (CBK) issued licenses to them. With this digital credit providers (DCPs) have risen to 51, intensifying competition in this lucrative segment. CBK said that the firms have been registered in collaboration with other regulatory authorities, including the Office of the Data Protection Commissioner, to ensure compliance with rules governing the digital lending space. The focus of the engagements has been inter alia on business models, consumer protection, and fitness and propriety of proposed shareholders, directors, and management, stated the bank. This is to ensure adherence to the relevant laws and, importantly, that the interests of customers are safeguarded
The licensing comes nearly a year after the last one, and close to two years since the CBK required mandatory registration of DCPs, a move aimed at controlling a sector that had become notorious for charging high interest on loans and abusing user data. It is the fourth round of licensing since CBK started giving nods to DCPS in October 2022, after the six-month mandatory registration window expired.
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Applications from firms seeking to enter the digital lending space increased to 480 from the 401 CBK reported at the time of the last licensing in March 2023. CBK says the new applicants are “at different stages of the process, largely awaiting the submission of requisite files. The industry has been growing, with an estimated four per cent of Kenyans accessing credit through DCPs, according to the latest data.
