Hundreds of mobile lending apps in Kenya could be forced out of the market soon if a new bill sails through.
The Central Bank of Kenya (Amendment) Bill, 2021 by nominated MP Gideon Keter spells strict measures, including a requirement to be licensed by the Central Bank of Kenya (CBK) within six months after the law becomes operational.
The Bill comes at a time mobile (digital) lending apps in Kenya are facing accusations of money laundering, illegal mining of customer private data and shaming of borrowers who default on repayment.
The Bill also seeks to have CBK set the minimum liquidity and capital adequacy requirements, just like it does for banks.
The apps will also have to seek CBK’s permission for new products and pricing that includes loans charges and putting a ceiling on non-performing loans at not more than twice the defaulted amount if the Bill becomes law.
CBK will be tasked to vet the management of digital loan providers.
“Any person who before coming into force of this was in the business of offering credit facilities or loan services through a digital channel and is not regulated under any other law shall register with The Bank (CBK) within six months of coming into force of this Act,” says the Bill.
The apps will also have to disclose to the CBK the source of funds they are lending.