CBK gives digital credit providers six months to apply for licences

By JAMES ANYANZWA

Kenya’s Central Bank has issued a six months’ notice for digital credit providers (DCPs) to apply for licences or cease operations.

On his Twitter handle on Tuesday, Governor Patrick Njoroge said that regulations governing the operations of the DCPs will be gazetted later this month, paving the way for the licensing and oversight of the DCPs by Central Bank.

“All previously unregulated DCPs will be required to apply to CBK for a licence by September 2022 or cease operations,” said Dr Njoroge.

President Uhuru Kenyatta assented to the Central Bank of Kenya (Amendment) Act (2021), on December 7, 2021, providing CBK with the powers to license and oversight the previously unregulated digital credit providers.

The Amendment required Central Bank to publish Regulations within three months—by March 23, 2022—to govern the operations of DCPs.

The regulations—CBK (Digital Credit Providers) Regulations, 2021—bars digital lenders from threatening borrowers while recovering loans from them and prohibits the use of obscene language and improper debt collection tactics.

The amended Act also prohibits any person from engaging in the digital credit business without a licence and provides sanctions to offenders, including imprisonment for a term not exceeding three (3) years or a fine not exceeding Ksh5 million ($43,717) or both.