The Central Bank of Kenya (CBK) has announced the publication of the Central Bank of Kenya (Digital Credit Providers) Regulations, 2022 that seek to regulate digital lending service providers.
The Central Bank has issued a six months’ notice for the unregulated digital credit providers to apply for licences or cease operations.
“Consequently, in accordance with Section 59(2) of the CBK Act, all previously unregulated DCPs are required to apply to CBK for a license within six months of the publication of the Regulations, i.e., by September 17, 2022, or cease operations.” The bank said in a notice.
“The Regulations were issued pursuant to Sections 57(1), 57(3) and 57(4) of the Central Bank of Kenya Act (the CBK Act). They provide for the licensing and oversight of previously unregulated Digital Credit Providers (DCPs). The Regulations are now operational.” The monetary authority said in a public notice.
According to the regulator, the new laws will seek to address concerns raised by the public that relate to the predatory practices of the unregulated digital credit providers.
The bank said the regulations will particularly seek to address their high cost, unethical debt collection practices, and the abuse of personal information.
“The Regulations 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.” – It said in a statement to newsrooms.