A proposed Central Bank of Kenya (CBK) bill by a Kenyan member of parliment that seeks to empower the regulator regulate all digital financial services, products, and the providers of those services, has been making rounds on the Internet.
If adopted, the proposed CBK amendment bill grants the CBK immense powers making it a ‘super regulator’ that oversees the entire digital financial space in Kenya.
The bill proposes that CBK regulate and supervise the following:
All digital Financial services
All digital Financial products
Mobile digital lenders
All non-cash payments
All financial product advice
All credit under a regulated credit contract
All financial administration and management
The proposed Bill seeks to amend the CBK Act in order to ensure the regulator regulates the conduct of providers of digital financial products and services and financial products and services.
According to the CBK:
“The current position is that there is no legal framework governing digital borrowing platforms and other financial products and services. As such, the Central Bank of Kenya will have an obligation of ensuring that there is a fair and non-discriminatory marketplace for access to credit.”
The CBK has, for the longest time, been openly against the predatory nature of mobile digital lenders. The regulator has also been unwilling to recognize cryptocurrencies in Kenya, which has resulted in many local entrepreneurs and crypto firms getting locked out of the banking system if they are associated with digital currencies.
While there are obvious concerns as how the CBK will now supervise these innovative financial solutions, it remains to be seen if regulation will finally open up the space or it will continue to stifle it further limiting the growth of financial mobile and crypto products and solutions in the country.