CBK approves 27 more digital lenders to offer credit services in Kenya

The Central Bank of Kenya (CBK) has given the nod to an additional 27 digital credit providers (DCPs) to operate in the country as more people transition to the cashless world.

In a notice dated October 1, CBK said the decision to license the firms is according to Section 59(2) of the Central Bank of Kenya Act.

The move brings to 85 the total number of licensed digital credit providers in the country, following the last licensing of seven DCPs in June 2024.

CBK said it has received more than 730 DCP applications since March 2022 and has worked closely with the applicants in reviewing their applications.

It reiterated that it has engaged other regulators and agencies in line with the licensing process, including the Office of the Data Protection Commissioner.

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

Nevertheless, CBK said that other applicants are at different stages of the process, largely awaiting the submission of requisite documentation.

“We urge the remaining applicants to submit the pending documentation to enable completion of the review of their applications,” CBK said.

The accreditation is part of regulations introduced last year to weed out rogue players in the booming industry and to control how lenders use consumer data.

This after it emerged that some companies were contacting family and friends of customers who defaulted on their payments or failed to pay on time.

There have also been complaints of some lenders imposing huge interests against the provisions of the Digital Credit Providers Regulations of 2022.

CBK Governor Kamau Thugge told Parliament in December last year that they were probing over 400 digital credit companies over fraud concerns.