Thirteen digital lenders have signed a code of conduct to commit to responsible lending solutions among them providing standardised charges.
Digital Lenders Association (DLAK) chairman and Zenka mobile loan app CEO Robert Masinde said that the Code of Conduct will promote ethical business practice and address emerging consumer protection issues.
“The code requires digital lenders to practice responsible lending, disclose standardized pricing, improve transparency and fairly resolve customer disputes and raising the bar on ethical lending,” Masinde said.
DLAK has also established a code compliance committee to handle cases where a member fails to adhere to the set guidelines.
The committee will have the power to call out signatories who it finds to be non-compliant.
Early this month, Central Bank of Kenya governor Patrick Njoroge raised concerns of increasing number of mobile loan apps exploiting consumers.
He said CBK will introduce a label of approval from the regulator to protect Kenyans from fraudulent dealers, meanwhile calling them to be on the lookout.
Tala regional country growth manager Ivan Mbowa said there will be a definite change in mindset towards fintech by customers.
“Years ago, there was a limited understanding of the difference between digital lenders and some of the “less reputable” short-term funding options, but now there’s a growing understanding of the new players’ role in the finance sector,” he said .
He added that the ability of digital lenders to bridge to formal finance in filling a market need will enable them to extend high-quality financial services to underserved communities and contribute to the national financial inclusion agenda.
