Kenya’s Rogue Digital Lenders Under Fire for Debt Shaming and Privacy Breaches
Despite past warnings, some digital lenders have returned to aggressive debt collection tactics, contacting borrowers’ friends and family and exposing personal data, prompting regulators to step in.
For many Kenyans, digital loans have become a lifeline—quick money for medical bills, school fees, or simply making it to the end of the month. But the same loans that promise relief have too often brought borrowers shame and harassment.
Now, the Office of the Data Protection Commissioner (ODPC) wants the Central Bank of Kenya (CBK) to revoke the licences of two lenders it says have ignored the rules and continued to abuse borrowers’ personal data.
The ODPC says complaints have piled up despite earlier warnings and penalties. Debt collectors linked to the two lenders have reportedly bombarded borrowers’ contacts with messages and calls—tactics meant to embarrass and pressure people into paying.
“We have seen a reduction in complaints, but we still have rogue digital lenders. For these repeat lenders, we have written to CBK to strike out their certificates,” Data Commissioner Immaculate Kassait told this publication.
The law is clear: lenders are not allowed to dig into borrowers’ phonebooks or post personal details online in the name of debt recovery. Yet a spot check in June revealed that some have quietly returned to those old ways.
One such case involved Chapeo Capital Limited, which runs ZKPesa and Chapeo Cash. Borrowers’ contacts were sent alarming texts: “Your contact **** has an unpaid loan of Sh1,720 due for seven days… Please urge them to pay NOW.”
Whitepath, Rocketpesa, Platinum Credit, Azura Credit, Mulla Pride, and Credit Watch Investments have also been named in complaints, with accusations of harassment and debt shaming. Some have already faced fines.
For players who follow the rules, the rogue tactics are frustrating. Kevin Mutiso, chair of the Digital Financial Services Association of Kenya (DFSAK), says enforcement has been too soft, creating room for misbehavior.
“There is a perception that regulation can be managed. Enforcement will be a signal that this can no longer be the case,” Mutiso said, urging CBK to act fast.
The CBK has so far licensed 27 digital lenders, but hundreds more—574 at last count—are waiting in line. The regulator began policing the sector after public anger over high costs and aggressive collections.
Digital loans remain attractive because they’re fast and collateral-free. But without firm action, critics say, the same lifeline could keep turning into a source of humiliation for borrowers.
Go to TECHTRENDSKE.co.ke for more tech and business news from the African continent.
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