The Central Bank of Kenya (CBK) Governor, Patrick Njoroge, has put on notice all unlicensed and unregulated digital lenders that it will require them to get registered and approved by the Central Bank of Kenya.
Speaking at Kondele Market during the rollout of the Stawi Loan App, CBK Governor, Patrick Njoroge said:
“All financial services and products will soon have a label of approval by the CBK to be able to guide users on which products to use.”
All mobile loan providers are regulated under the new strict guidelines stipulated in the Banking Charter which came into effect on May 29, 2019.
Some of the proposed guidelines under the CBK Banking Charter include:
Mobile loan apps must text their customers of their products, terms and conditions before approving a loan request.
Terms and conditions must not be limited to an in-app version but also in USSD.
The terms and conditions must state interest rates, fines for late repayment, compliant processes, and protection of consumer data.
Lenders must submit documentations such as credit agreements, fact statements, and websites. Part of this information should be available in their offices / branches / agents.
All of the above comes in the wake of the launch of the Digital Lenders Association of Kenya (DLAK) which seeks to self-regulate and ensure members meet the highest standards in lending. The CBK however says it will not allow players to self-regulate and instead, will enforce the rules and regulations above.