Pezesha, M-Kopa Bag Digital Lending License In Kenya Amid Strict Industry Cleanup
The Central Bank of Kenya (CBK) has announced the licensing of an additional 12 Digital Credit Providers (DCPs). This brings the number of licensed DCPs in Kenya to 22 following the licensing of 10 DCPs announced in September 2022.
The CBK has received 381 applications since March 2022 and worked with the applicants in reviewing their applications, approving just under two dozen digital lenders so far including some better-known names like MFS Technologies, M-KOPA, Pezesha, and Jumo. This is vital to efforts aimed at cleaning up Kenya’s digital lending space which had become a haven for rogue operators over recent years.
However, there has been some agitation of late from a section of yet-to-be-licensed lenders who have decried what they perceive as a slow-paced process that has their business in jeopardy. Curiously, some of the notable players, such as Branch and Tala, that featured prominently in accelerating digital lending in Kenya remain missing from the licensed list, though Tala did issue a statement last year reiterating that it was awaiting approval having applied with the CBK as required.
Nevertheless, the apex bank says it has engaged other regulators and agencies pertinent to the licensing process, including the Office of the Data Protection Commissioner.
The focus of the engagements has been among other things on business models, consumer protection and fitness and propriety of proposed shareholders, directors, and management. This is to ensure adherence to the relevant laws and that the interests of customers are safeguarded.
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“We acknowledge the efforts of the applicants and the support of other regulators and agencies in this process. Details of the 22 licensed DCPs can be accessed here,” the CBK wrote in a statement released today.
It is understood that other applicants are at different stages in the process, mainly awaiting the submission of requisite documentation.
“We urge these applicants to submit the pending documentation expeditiously to enable completion of the review of their applications,” the CBK added while imploring the general public to be expeditious in reporting unauthorised lenders.
The licensing and oversight of DCPs as indicated was precipitated by concerns raised by the public about the predatory practices of the unregulated DCPs, and in particular, their high cost, unethical debt collection practices, and the abuse of personal information.
Featured Image Credits: Moolah
