The Central Bank of Kenya on Wednesday cleared 19 more digital lenders exemplifying the thirst for quick and easy credit among Kenyans and booming business among the lenders.
The latest move by CBK brings to 51 the total number of Digital Credit Providers (DCPs) in the country and adds to the 32 DCPs that were announced in March 2023.
There are more than 400 applications by these lenders still pending at the Central bank.
With access to personal loans proving difficult Kenyans have turned to mobile apps forcing major lenders to join the competition.
The number of digital lenders is higher than the 39 banks currently in operation in Kenya.
The market has grown so big with some playing in the big league alongside banks in terms total amount of loans disbursed.
For Instance as of February 2023 Tala disclosed that it had disbursed $1.9 billion (Sh272 billion at current exchange rate).
Having been in operation in Kenya for nine years at the time this translates to around Sh32.2 billion annually.
Central Bank Of Kenya says it has received 480 applications since March 2022 and has worked closely with the applicants in reviewing their applications.
Additionally, CBK has also engaged other regulators and agencies pertinent to the licensing process, including the Office of the Data Protection Commissioner.
The newly licensed lenders include Lipa Later Limited, Ceres Tech, Azura Credit Chapeo Capital, Chime Capital, Creditarea Capital Decimal Capital, Dexintec Kenya Limited, Factorhouse Limited and Fezotech Kenya Limited.
Others are Fortune Credit Limited, Lobelitec Credit, Maralal Ledger, Marble Capital Solutions, MKM Capital, Pi Capital Limited, Senti Capital, UbaPesa Limited and Zillions Credit Limited
“We acknowledge the efforts of the applicants and the support of other regulators and agencies in this process,” CBK adds in the statement.
The regulation of digital credit providers is expected to bring sanity and order in the sector and reign in rogue lenders
Concerns regarding high credit costs, unethical debt collection practices, and misuse of personal information prompted digital credit providers to fall under the purview of banking sector regulation.
This prompted the MPs and Senators to summon the directors of the firms involved.
The Senate Finance committee was forced to seek guidance from CBK whether it had instituted a predatory lending detection system and whether as the regulator, they had reined in on entities abusing the law.
CBK noted that most of the lenders were unregulated exposing borrowers to exploitation as they were not under its control.
Senate's inquiry was triggered by petitions on four micro-lending entities imposing huge interests against the provisions of the Digital Credit Providers Regulations of 2022.
