Digital lenders have raised concerns over delays in obtaining operational licences from the Central Bank of Kenya (CBK).
Business Daily reports that several executives from the loan companies say that they are facing the risk of hard economic times if the regulator fails to award the licenses soon. All digital regulators were supposed to seek fresh licensing, as per CBK (Digital Credit Providers) Regulations, 2022.
By September last year, CBK had cleared only 10 lenders out of over 300 that applied for fresh licensing as directed by the regulator.
There are 278 digital credit providers (DCPs) that have been allowed to continue with their business as they await CBK’s response to their application.
Digital lenders have come under sharp scrutiny with customers raising concerns about data breaches while transacting on their apps. The high-interest rates charged on the platforms have also caught the attention of lawmakers.
Google has also made efforts to rein on the popular loan platforms. In November last year, the tech giant directed all DCPs to provide CBK licenses for them to be listed on PlayStore.
“Digital Credit Providers (DCP) should complete the DCP registration process and obtain a license from the Central Bank of Kenya (CBK). You must provide a copy of your license from the CBK as part of your declaration.” Google said in a statement.
Since December 15, 2022, Google has declined to admit loan apps that don’t have CBK permits.
“Currently we only accept declarations and licenses from entities published under the Directory of Digital Credit Providers on the official website of the CBK,” says Google.
The CBK hasn’t issued any response over this situation, although it indicated in September that “Other applicants are at different stages in this process.”