Central Bank of Kenya Governor Patrick Njoroge is on record as saying that digital lenders are operating outside legal confines and will soon be regulated.

According to Daniel Szlapak, Director for Africa at Branch International, digital mobile lenders are not averse to regulation "if done in a well-meaning structure."

Speaking at the recent Seamless East Africa conference, Szlapak said, "We only hear about regulation in the press but there is no structure for regulation. My dream is for the regulator to say 'let's talk about how we can regulate the FinTech sector'. That would be the ideal place to start."

"There are a number of regulations that are happening in Kenya: there is the rate capping, the data protection and others. But we have never been invited to comment if interest rate caps work, how should we regulate the sector or what are our recommendations," he added.

However, the Branch International executive did say the company was invited to participate in discussion regarding the data protection Bill.

Szlapak said regulation is required and of the countries that Branch International operates in, Kenya is the only one without a FinTech policy. "The government's role is to ensure their policies are conducive to businesses and fair to consumers," he added.

In reference to the Financial Markets Conduct draft Bill and its intended regulation of microfinance institutions (including mobile lenders), Szlapak said capping interest rates has not succeeded globally.

Branch International's rates are under 20% (which varies from customer to customer) and the company will secure loan volume of US$300 million by the end of 2018, based on all the markets they operate in.

A recent report by FSD Kenya claimed there are approximately 49 digital mobile lenders in Kenya serving six million users.