The Central Bank of Kenya (CBK) has given all digital lenders up to Saturday, September 17 to apply for operational licences or risk being shut down.
Last year, the Kenyan Parliament approved the Central Bank of Kenya (Amendment) Bill which bestowed the Central Bank with the power to regulate digital lenders.
The approval subjects digital lenders to the Data Protection Act, which prevents them from violating users’ privacy through debt-shaming.
Earlier this March, the CBK published the Digital Credit Providers Regulations, 2022 which requires digital lenders to obtain licences from the CBK in order to operate in the country.
Now, the wait period is over and the CBK expects that all lenders should have submitted applications by Saturday.
In a legal alert document, Joseph Githaiga and Caroline Kipkulei of PwC’s Legal & Regulatory Compliance Advisory department shed more light on the situation: “Similar to other CBK regulated financial institutions, new digital credit providers seeking a licence are first required to submit their proposed names to the CBK for approval before proceeding to incorporate a company with the Registrar of Companies. Upon submission of a digital credit licence application with the CBK, the CBK may grant or reject the application within sixty (60) days from the date of receipt of the application.”
This year, Kenya has taken a tough stance in regulating its digital ecosystem. While some regulations like the Digital Credit Providers Regulations have received wide acclaim, others like its ICT Practitioners’ Bill have been widely criticised by the public and government officials.
