APPROVAL

Mogo gets CBK's nod to provide digital credit services

This, as it accelerates motor vehicle and boda boda lending.

In Summary

•Mogo is among an additional seven Digital Credit Providers (DCPs) that the CBK has approved, bringing the total number to 58. 

•CBK has received more than 550 applications since 2022 and has worked closely with the applicants in reviewing the applications.

Credit analyst Nobert Gacheru with Mogo Kenya Country Manager Domas Mineikis when the firm marked its fifth anniversary in Kenya/ HANDOUT
Credit analyst Nobert Gacheru with Mogo Kenya Country Manager Domas Mineikis when the firm marked its fifth anniversary in Kenya/ HANDOUT

The Central Bank of Kenya (CBK) has approved East Africa’s leading asset financier, Mogo, to provide digital credit services in the country.

Mogo is among an additional seven Digital Credit Providers (DCPs) that the CBK has approved, bringing the total number to 58. 

"The Central Bank of Kenya (CBK) announces the licensing of seven Digital Credit Providers (DCPs). This is pursuant to Section 59(2) of the CBK Act," CBK said in a statement. 

CBK has received more than 550 applications since 2022 and has worked closely with the applicants in reviewing the applications.

The apex bank has engaged other regulators and agencies pertinent to the licensing process, including the Office of the Data Protection Commissioner. 

"We are thrilled that CBK has finally approved our lending license to continue providing MSMEs with affordable financing to acquire assets and accelerate financial inclusion,” said Domas Mineikis, Mogo Kenya Country Manager. 

Mogo is a microfinance firm offering vehicle financing products, such as vehicle loans, allowing customers to acquire vehicles from third parties.

This provides mobility to individuals previously denied access to funds by banks and other credit institutions. 

"Since starting operations in Kenya five years ago, Mogo has lent Sh20 billion for boda boda and motor vehicle loans and provided affordable financial products to more than 120,000 Kenyans all of whom are engaged in productive economic activities," added Mineikis. 

Mogo also offers logbook loans, where customers receive loans against their logbooks while continuing to use their vehicles throughout the loan duration.

These logbook loans often serve as crucial support for small business owners needing working capital to grow their ventures, especially those unable to secure funding from banks. 

CBK said that it has been working with other regulators and agencies in the licensing process, such as the Office of the Data Protection Commissioner. 

"The focus of the engagements has been, inter alia, on business models, consumer protection, and the fitness and propriety of proposed shareholders, directors, and management. This is to ensure adherence to relevant laws and, importantly, that the interests of customers are safeguarded." 

The Central Bank (Amendment) Act, 2021, allows CBK to regulate non-deposit-taking credit providers and has empowered the regulator to suspend any DCP that breaches data confidentiality by pursuing borrowers as well as high-interest rates.

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