- The Central Bank of Kenya (CBK) has issued licences to seven Digital Credit Providers (DCPs), bringing the total number of licensed DCPs to 58. This follows an earlier batch of 19 DCPs in March 2024.
- The seven newly licensed loan operators are UbaPesa Limited, Stride Credit Limited, Senti Capital Limited, Progressive Credit Limited, Payablu Credit Limited, Mogo Auto Limited, and Mint Credit Limited.
Since March 2022, Kenya’s apex bank has received 550 applications, an increase from the 480 applications as of March 2024.
The CBK says it has worked closely with applicants in the review process, engaging other regulators such as the Office of the Data Protection Commissioner.
Prior to the March licences, CBK licensed 10 DCPs in September 2022, another 12 DCPs in January 2023, and 10 more DCPs in March 2023, making a total of 51, before the latest batch increased the count to 58.
“The focus of the engagements has been, inter alia, on business models, consumer protection, and the fitness and propriety of proposed shareholders, directors, and management. This is to ensure adherence to the relevant laws and, importantly, that the interests of customers are safeguarded,” the CBK said.
While some applicants have been awarded licences, others are still at different stages in the process, yet to submit pending documentation to aid the review of their applications.
This suggests that a new batch may be announced soon if they complete the process and meet the requirements, as CBK noted that they are “largely awaiting the submission of requisite documentation.”
The Central Bank of Kenya is also strict on unregulated DCPs, providing an avenue for the public to report unregulated DCPs in its release on the licences.
Moreover, the licensing and oversight of DCPs by the regulator resulted from public outcry about the practices of unregulated DCPs, including their high cost, unethical debt collection practices, and the abuse of personal information.
Similar concerns, such as customer harassment, defamation, and unethical recovery methods used for these loans, are prompting the regulator in Tanzania and even in Nigeria to tighten the environment for loan app operators, delisting up to 47 unregistered loan apps from the app store and suggesting measures to sanitise the industry.
Aside from DCPs, Kenya’s central bank plans to grant payment licences to fintech startups, reviewing an initial regulation expected to expand the country’s payment market. This development reportedly spurs fintech companies like Flutterwave and Chipper Cash to consider obtaining licences in the nation.
