Central Bank of Kenya tightens the noose on unregulated mobile money lenders ▷ Kenya News

- Patrick Njoroge had expressed fear unregulated mobile lenders could be exploiting Kenyans with high interest rates

- He said regulator would be launching a service which will make it possible for customers to know whether mobile lender is approved or not

- The service, Njoroge indicated, will protect cash hungry borrowers from the unregulated credit-only institutions

Kenyans may soon start receiving notifications from Central Bank of Kenya (CBK) informing them whether the mobile money lender they are borrowing from has been approved by the regulator or not.

The move is aimed at protecting customers from unregulated credit-only institutions which the CBK boss Patrick Njoroge indicated could be exploiting Kenyans with high interest rates.

READ ALSO: CBK says mobile lenders could be used as money laundering avenues

Central Bank of Kenya governor Patrick Njoroge indicated regulator would be launching a service that will inform borrowers to know whether a mobile lender has been approved or not. Photo: CBK.
Source: UGC

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Speaking during opening of the Afro-Asia Fintech Festival in Nairobi on Tuesday, July 16, Njoroge stated the regulator was planning to launch a service that will enable borrowers to know approval status of the mobile loan apps when applying for loans.

“We want to ensure that the consumer is not being taken advantage of, and that the client’s information is secure,” he said.

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Some of the mobile apps that have already received stamp of approval from the regulator include Safaricom's M-shwari and Fuliza, KCB-Mpesa, Stawi for small and medium-sized enterprises (SMEs) and a number of online financial products offered by the commercial banks.

Those who are reportedly yet to receive the regulator's approval include Tala, MyCredit, Okash, Branch and Okolea to mention a few.

In June 2019, members of the Digital Lenders Association of Kenya (DLAK) launched a self-regulating programme, but the CBK governor was seemingly unsatisfied with the move.

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Appearing before Senate's Committee on ICT on July 10, 2019, Njoroge pointed out that unlike local commercial banks, the credit only facilities do not use customer deposits to do business.

He said some of the mobile money lenders could be using personal finances that could also be proceeds of illegal businesses but lend it to cash hungry Kenyans in attempts to sanitise their ill-gotten riches.

"There is a huge lacuna because there is no specific law that is targeted at them. There are gaps because we have laws for commercial banks and not credit-only institutions that use individual resources for lending. In fact, these institutions are nothing but shylocks," he told the senators.

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