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Digital Lenders Welcome Proposal to be Regulated by CBK /COURTESY


Digital Lenders Welcome Proposal to be Regulated by CBK

NAIROBI, Kenya, Jul 9 – Digital Lenders now say they support the proposal to have their work regulated by the Central Bank of Kenya (CBK).  

In a statement, Digital Lenders Association Chairperson Kevin Mutiso says they support the recent regulation drafted by the parliamentary finance and planning committee proposing to put them under the regulatory ambit of CBK.

The Association has however made a raft of proposals they want implemented in the Committee’s draft, among them having regulation that is focused on the registration process instead of licensing.

Such registration, Mutiso said, would be managed by CBK, and digital Lenders would be obliged to update the data contained in the register.

“Digital Lenders are small companies with a maximum of 30 employees. Thus, the best solution is to use regulatory systems that will fulfill its task and make the legislator feel comfortable with the applied solution, but at the same time will not cause a significant increase in the operating costs of a company, nor will it be a complicated and highly formalized process.”

The digital lenders also want the CBK to allow them into the credit information sharing system /COURTESY

The digital lenders also want the CBK to allow them into the credit information sharing system from which they were locked out at the onset of the COVID-19 pandemic.

“We propose to add direct regulation that the Digital Credit Providers will be entitled to receive the reports from CRBs and to submit the reports with credit information to CRBs as well,” he said.

The lenders also want all customers to be provided with clear, transparent, and articulated information on the pricing of the loans before they apply for the loan.

This should be done by providing the conclusion of the loan agreement in the unified form with the key financial information concerning the loan.

“This solution is implemented in all EU countries, but also we can find it in Uganda.”

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To further increase consumer protection, the Association also calls for the establishment of a position of a financial ombudsman within the CBK structures, responsible for examining customer complaints.

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