12 more Kenyan digital lenders get licenses

The Central Bank of Kenya (CBK) has licensed a further 12 digital lenders, bringing the total number of licensed Digital Credit Providers (DCPs) to just 22 in the East African country.

In September 2022, the bank granted only 10 digital lenders operating licenses.

In a statement, the CBK said it had received a total of 381 applications since March last year and that the process to license the remaining ones was ongoing.

"Other applicants are 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," the regulator added.

The CBK also said it has engaged other regulators and agencies pertinent to the licensing process, including the Office of the Data Protection Commissioner.

"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 CBK stated.

Licensing woes

There are still hundreds of digital lenders that have not being granted operating licenses and some have vented their frustration that the delay has led to their apps being blocked on the Google Play Store.

Kenya's government, through the CBK, has been on a mission to clean up the digital lending industry to get rid of illegal operators. Before 2021, many digital lenders operated in the country without licenses and regulations, which increased unethical practices.

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This led to the regulator demanding that all digital lenders register for new licenses. Those that didn't meet the application requirements were barred from the industry.

Furthermore, in cleaning up the sector, Kenya's Office of the Data Protection Commission (ODPC) said in October 2022 that it was auditing at least 40 digital lenders for data breaches against their customers.

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*Top image source: Image by wirestock on Freepik.

— Matshepo Sehloho, Associate Editor, Connecting Africa