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CBK ushers in new chapter in FinTech regulation

Kenya , 19 Sep 2022

The Central Bank of Kenya (CBK) has licensed ten digital mobile lenders who will operate under new banking rules.

According to the new regulations, mobile/ digital lending service providers are now under jurisdiction of the Central Bank, effectively locking out digital lenders who did not apply for the licensing.

A statement released by the CBK reads: “This is pursuant to Section 59(2) of the Central Bank of Kenya Act (CBK Act), that required all operating unregulated DCPs to apply to CBK for a license within six months of the publication of the Central Bank of Kenya (Digital Credit Providers) Regulations, 2022 (the Regulations), i.e., by September 17, 2022, or cease operations.”

CBK received 288 applications since March 2022 and encouraged those not licensed to submit required documents in order to be cleared.

Those companies cleared include: Ceres Tech Limited, Getcash Capital Limited, Jijenge Credit Limited, and Mwanzo Credit Limited.

CBK added: “We urge these applicants to submit the pending documentation expeditiously to enable completion of the review of their applications.”

Applications are required to provide clear indications of the terms and conditions, including the interest rate applied and other charges. Digital lenders are also required not to share personal data or use applicants’ personal data in trying to compel loan repayments.

The law also compels mobile digital lenders to disclose the ownership of the companies and source of funds in a bid to thwart money laundering schemes.

CBK said it has ensured that all relevant regulators, including the Office of the Data Protection Commissioner, are involved in the compliance process.

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