KNCCI, Digital lenders build ecosystem to provide credit solutions to SMEs

KNCCI, Digital lenders partner to provide credit solutions to SMEs

Kenya National Chambers of Commerce and Industry (KNCCI) agreed to build an ecosystem with Digital lenders in the country to provide credit solutions to small businesses.

Addressing the stakeholders during the 5th Small and Micro-Enterprises (SMEs) financial inclusion dialogue, Julius Opio, KNCCI Chairman said it will help businesses get access to finance through digital lending from micro-enterprise entities to small and medium enterprises.

“What we are doing today is to build an ecosystem on a digital system whereby businesses can get services going beyond just M-Pesa transactions.  So what we have come up with is to look at various opportunities and challenges that are faced when it comes to digital lending using the digital platform,” said Opio.

This, according to Ronal Meru, Director at KNCCI Nairobi said this would be achieved by regulating the digital lending sector.

“Before we used to have rogue digital lenders who would be very intrusive in terms of how you do your lending but now with what we have come up with we have lenders fully vetted making sure that there are no intrusive digital lenders in the market,” said Meru.

Safaricom SMEs and Channel Regional Manager Stephen Karanja present at the event reaffirmed the telcos commitment to provide SMEs with credible information, financial inclusion to accelerate digitisation of businesses as well as to bridge the trade financing gap.

 “SME is a big thing in this country and as Safaricom we are moving to be a technology company by 2025 and we want to help the SMEs to be digital and to be able to use digital platform to be able to help them raise their businesses.”

The forum also looked at how private sectors can develop and adopt  blockchain technology when it comes to providing services.

According to the Central Bank of Kenya (CBK) Digital Credit Providers (DCPs) must to apply for an operational license in the country and warned no extension will be granted.

In March, CBK gazetted the digital lenders regulations paving way for their oversight and supervision. The regulator issued them a six-month period to comply.

“…is to remind all currently unregulated DCPs that have yet to apply for licensing, that they now have four months to the September 17, 2022, deadline.”

The CBK digital credit providers’ regulations 2022 proposed the licensing and oversight of the DCPs, which were previously unregulated amid a backlog of crime-related proceeds that thrives through digital lenders.

It mandates CBK with the role to  control  high-interest rates, unethical debt collection practices, and the misuse of personal data by some digital lenders.

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