Google has removed hundreds of Kenyan-focused loan apps from Play Store, in compliance with the new digital lenders policy which requires apps to be duly licensed by the Central Bank of Kenya (CBK).
In November last year, Google directed loan app publishers to ensure they have fully complied with CBK requirements before being allowed on Play Store. The tech giant gave the apps a 30-days grace period but has just recently taken action.
Digital Credit Providers (DCP) regulations came into effect last year and stipulate how various compliance demands that lenders must adhere to. It’s not clear how many apps have been removed from the Google Play Store, but TechCrunch reports that they could be around 500 under the finance category.
As of January, only 22 digital lenders, including Tala, a PayPal-backed lending app; Pezesha, a B2B embedded lending platform; Jumo, a fintech provider providing financial services including lending, were granted a license out of 381 that applied, according to the Central Bank of Kenya.
The new rules were meant to put the industry under control, following several reports of misuse of data by digital lenders. CBK has been at the forefront of tightening its regulatory approach in the industry that was previously largely unregulated.
Many users had flocked to the credit apps as they offered quick, unsecured personal or business loans; with little to no collateral requirements. However, they have been accused of charging e exorbitant interest rates, applying debt-shaming tactics to recover their money, and sharing customer data with third parties. These are part of the practices that CBK hopes to stem with new regulations.