Financial Regulator CBK Stops Loan Apps From Harassing Defaulters

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Monday, March 21, 2021 -Financial regulator has stopped lenders from harassing borrowers and using unorthodox means to collect debts from those defaulting.

In a statement seen by Homenews.co.ke on Monday March 21, Central Bank of Kenya CBK has warned digital lenders against misconduct in the market.

The move by the regulator is informed by a huge public outrage over the way the lenders are conducting their businesses unchecked.

“These concerns relate to the predatory practices of the previously unregulated digital credit providers, and in particular, their High cost, unethical debt collection practices, and the abuse of personal information.

“The Regulations provide for inter alias the licensing, governance, and lending practices of DCPs. They also provide for consumer protection, credit information sharing, and outline the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) obligations of DCPs,” read part of the issued statement.

The players will, therefore, be required to re-apply for licenses in a period of six months so that by September this year, they will have been approved or be kicked out of the business.

The mushrooming lenders have for long been accused by members of public for taking advantage of poor citizens in the country in the name of loans.

It also saw the head of State talk about it in December 2021. He would shortly assent to the Central Bank of Kenya (Amendment) Bill barring digital lenders from revealing personal data of their loan defaulters.