The Central Bank of Kenya (CBK) has barred unregulated digital mobile lenders from forwarding the names of loan defaulters to credit reference bureaus (CRBs) and stopped the blacklisting of borrowers owing less than KES 1,000. The CBK has also issued licenses to only 32 digital lenders, out of the 400 that are currently operating in the country. This move is part of the CBK’s efforts to regulate the previously unregulated digital credit providers (DCPs) in the country.
The CBK’s decision to bar unregulated digital mobile lenders from forwarding the names of loan defaulters to CRBs is a significant development in the digital lending industry. It will help to protect borrowers from being unfairly blacklisted for small amounts of debt. The licensing of digital lenders will also help to improve the quality of services offered by these lenders and ensure that they operate within the law.
However, there are still concerns about the high interest rates charged by digital lenders and the impact this has on borrowers. The Senate has called on the CBK to hasten the audit of digital lenders to ensure that they are operating within the law and not exploiting borrowers.
The Senate has also called on the CBK to regulate the interest rates charged by digital lenders and ensure that they are not exploitative . The high interest rates charged by digital lenders have been a major concern for borrowers, with many falling into debt traps as a result .
The CBK’s decision to regulate the digital lending industry is a step in the right direction. It will help to protect borrowers from being exploited by unscrupulous lenders and ensure that they are treated fairly. However, more needs to be done to address the issue of high interest rates and ensure that borrowers are not burdened with excessive debt.