The number of firms allowed to offer digital credit services to Kenyans has risen to 51 after the Central Bank of Kenya (CBK) licenced 19 more firms, intensifying competition in the lucrative industry.
A CBK statement Wednesday said the new licensees have been registered in collaboration with other regulatory authorities, including the Office of the Data Protection Commissioner, to ensure compliance with new rules governing the digital lending space.
“The focus of the engagements has been inter alia on business models, consumer protection and fitness and propriety of proposed shareholders, directors, and management,” the apex bank said.
“This is to ensure adherence to the relevant laws and importantly that the interests of customers are safeguarded.”
Read: Kenya’s fintech loans leave trail of regret
Abusing personal data
The new licensing comes nearly a year after the last one, and close to two years since the CBK required mandatory registration of digital credit providers (DCPs), that aimed to rein in the sector, which had become notorious for charging high interest on loans and abusing user personal data.
It is the fourth round of licence issuances since the CBK started okaying DCPs in October 2022, after the six-month mandatory registration window expired.
The new licensees are Autocheck, Azura, Chapeo, Chime, Creditarea, Decimal, Dexintec, Factorhouse, Fezotech, Fortune, Lipa Later, Lobelitec, Maralal Ledger, Marble Capital, MKM Capital, Pi Capital, Senti Capital, Ubapesa, and Zillions Credit.
At the time new applicants sought to enter the digital lending space increased by 79 to 480, up from the existing 401, CBK’s licensing signals growing appetite for the industry.
Read: Foreign banks tweak models in battle for EA retail market
The financial sector regulator said the new applicants were at “at different stages in the process, largely 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.”
Digital loans have been on the rise, with an estimated 4 percent of Kenyans accessing credit through DCPs, the latest Financial Access Survey by Kenya National Bureau of Statistics shows.
Source: The East African
Share this content: