Kenya on Monday effected new regulations on digital lending in a bid to control the fast-growing sector, whose operators have been accused of exploiting borrowers, engaging in predatory practices as well as aiding money laundering.
The Central Bank of Kenya (CBK), the central bank, said in a statement issued in Nairobi, the capital of Kenya, that the new laws target digital credit providers and seek to address any concerns raised by the public.
“These concerns relate to predatory practices of the previously unregulated digital credit operators, in particular, their high costs, unethical debt collection practices and the abuse of personal information,” said the apex bank.
The CBK said all operators had from Monday been given six months to register or cease operation when the period lapses on Sept. 17.
The regulations provide a framework for licensing, consumer protection, lending practices, credit information sharing and outline anti-money laundering and combating the financing of terrorism obligation of operators, added the bank.
“A digital credit provider shall provide to the Central Bank the evidence and sources of funds invested or proposed to be invested in the digital credit business and demonstrate that the funds are not proceeds of crime,” read part of the regulations. Enditem