Gladys Wanga says there is need to protect consumers
The National Assembly Committee on Finance and National Planning is republishing the bill to amend the Central Bank of Kenya (CBK) Act in a bid to regulate digital lending in the country.
The bill first introduced by former Bonchari Member of Parliament the late Oroo Oyonka was seeking to put digital lenders under the radar of the CBK which will, in turn, regulate the interest rates charges by digital lenders.
Speaking during the official launch of the regulatory white paper on regulations of digital lending in Kenya, Gladys Wanga said it was important to protect consumers who have been left vulnerable in the age of digital lending.
While Digital Lenders Association of Kenya (DLAK) is open to the concept of regulation, Kevin Mutiso, Chairperson DLAK maintains that lenders are business entities that must make a profit and regulation must not stifle innovation.
“A more appropriate regulatory model would be one that enhances consumer protection through the regulation of the conduct of credit providers over the digital lending platforms,’’ said Mutiso.
PricewaterhouseCoopers (PwC) proposes that all non-deposit taking providers offering credit to the public, regardless of their business model, be bound by a set of consumer protection principles.
These include transparency and fairness in dealings with consumers, transparent pricing principles, disclosure of key terms and conditions and restrictions on certain debt collection practices.
Others are credit information reporting, marketing guidelines for consumer credit products, complaints handling and dispute resolution.
The findings follow a comparative study on digital lending across 11 countries with an avalanche of regulatory items.
The study looked at digital lenders’ operations in Australia, Egypt, Uganda, India, Mexico, Nigeria, Poland, South Africa, Spain, United Kingdom and Singapore.
Most countries were found to regulate digital lenders under one or more regulatory items, broadly focusing on consumer credit and finance.