Loans -Central Bank of Kenya CBK has moved with speed to stop local lenders from harassing borrowers and using unorthodox means to collect debts from defaulters.
In a detailed statement seen by Pesatoday.com, the regulator warned digital lenders against misconduct while conducting their business.
“The Regulations seek to address concerns raised by the public given the recent significant growth of digital lending, particularly through mobile phones. These concerns relate to the predatory practices of the previously unregulated digital credit providers, and in particular, their High cost, unethical debt collection practices, and the abuse of personal information.
“The Regulations provide for inter alia the licensing, governance, and lending practices of DCPs. They also provide for consumer protection, credit information sharing, and outline the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) obligations of DCPs,” read part of the issued statement.
The players will, therefore, be required to re-apply for new licenses in a period of six months so that by September they will have been cleared to bounce back or be kicked out of the business.
The mushrooming lenders have for long been accused by members of public for taking advantage of poor citizens in the country.
It saw the head of State talk tough on the issue in December 2021. He would shortly assent to the Central Bank of Kenya (Amendment) Bill barring digital lenders from revealing personal data of their loan defaulters.
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