The Central Bank of Kenya (CBK) has announced the licensing of an additional 27 Digital Credit Providers (DCPs), bringing the total number of licensed providers to 85.
This move is in line with Section 59(2) of the Central Bank of Kenya Act (CBK Act), and it follows the approval of 7 DCPs in June 2024.
Since the beginning of the DCP licensing process in March 2022, the CBK has received over 730 applications from prospective digital lenders. The licensing procedure, which includes rigorous evaluation, has involved working closely with applicants to ensure they comply with relevant laws and regulations.
The CBK says it has “engaged with other regulatory bodies, such as the Office of the Data Protection Commissioner, to ensure that consumers’ rights are protected.”
List of Approved DCPs in Kenya
Tap on the link to access the list; Directory-of-Licensed-DCPs-September-30-2024
The focus of the licensing process has been on several critical areas. These include examining the business models of DCPs, assessing the propriety of shareholders, directors, and management, and ensuring that consumer protection measures are in place.
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This scrutiny is part of the CBK’s effort to safeguard the interests of customers and maintain ethical standards in the digital lending sector.
Kenyans had expressed concerns over the unethical practices of unregulated DCPs, which have been accused of predatory lending, charging excessively high interest rates, engaging in unethical debt collection practices, and mishandling customers’ personal information.
The licensing process aims to address these issues by ensuring that licensed DCPs adhere to ethical lending practices.
Previously Licensed DCPs
Prior to the licensing of these 27 new DCPs, the CBK had approved several other digital lenders. In 2022, 10 digital lenders were licensed. The following year, 22 more DCPs were granted licenses.
This licensing effort has been a crucial step in creating a more structured and regulated credit market in Kenya, particularly as the demand for digital loans continues to grow.
