President Uhuru Kenyatta signed the Central Bank of Kenya (Amendment) Bill into law, requiring all digital lenders in the country to be regulated by CBK.
The Bill grants the regulator powers to price interest rates for digital loans, putting an end to the era when mobile lenders have been manipulating Kenyans with quick but expensive loans.
CBK will control products that are put out by the digital lenders and also data from the borrower.
The Bill also provides for every digital credit provider to furnish CBK any information and data that the regulator will acquire to proper discharge of its function under the CBK Act.
“This provision id part of function on information and data gathering for proper supervision of lenders,” reads the Bill.
For the digital lenders who are not regulated by CBK and are operating within the Kenyan marketplace have until June 2022 next year to comply with registration requirements.
The Central Bank will also have up to 30 days upon receipt of application documentation to either issue a license to a fintech or notify them of the decline in approval.
Digital Lenders Association of Kenya (DLAK) has welcomed the regulation of the sector, saying it will help lower the cost of credit and deal with rogue lenders.
“Regulation is a sign of maturity of a market. It means we now have understood what are the limits of our products,” said Ivan Mbowa, Managing Director, Tala.
The Bill adds on top of other financial institutions CBK regulates, granting it supervisory and licensing powers to oversee hundreds of digital lenders operating in the country.
It is among other four Bills which the President signed into law on December 7.
They include; Tax Appeals Tribunal (Amendment) Bill., the Trustees (Amendment) Bill, Kenya Deposit Insurance (Amendment) Bill and the Public Private Partnership Bill, Central Bank of Kenya (Amendment) Bill.
National Assembly Speaker Justin Muturi, his Senate counterpart Ken Lusaka, Treasury CS Ukur Yatani and Head of Public Service Dr Joseph Kinyua attended the brief signing ceremony.
Others were Leader of Majority in the National Assembly Amos Kimunya, Solicitor General Ken Ogeto and State House Deputy Chief of Staff Njee Muturi.
