The Central Bank of Kenya (CBK) has licensed 27 additional Digital Credit Providers (DCPs), raising the total number of licensed DCPs in the country to 85. This comes after the last licensing round in June 2024, which saw seven DCPs approved.
The move is part of CBK’s efforts to regulate digital lending platforms in Kenya, which have faced numerous complaints from the public over unethical practices. In a statement, CBK highlighted that the licensing process was initiated to address concerns about predatory lending practices, including high-interest rates, unethical debt collection methods, and the misuse of personal information.
“We have worked closely with the applicants in reviewing their applications,” CBK said. Since the start of the application process in March 2022, CBK has received over 730 applications. However, many applicants are still in the process of completing their submissions, and CBK urged them to provide the required documentation for the review to proceed.
In a bid to protect consumers, CBK has collaborated with other regulatory bodies, including the Office of the Data Protection Commissioner. The focus of these engagements has been on the business models employed by DCPs and ensuring that consumer protection remains a top priority.
“The focus of the engagements has been among business models and consumer protection,” CBK stated. Additionally, the bank has emphasized the importance of the fitness and propriety of the shareholders, directors, and management of these companies to ensure they comply with the necessary legal requirements.
CBK expressed its gratitude to the applicants and the various agencies involved in the process, acknowledging their efforts in making the industry more transparent and accountable. “This is to ensure adherence to the relevant laws and, importantly, that the interests of DCPs’ customers are safeguarded,” the bank said.
