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Since March 2022, the Central Bank of Kenya (CBK) has received 550 applications for digital credit provider (DCP) licenses, up from 480 applications as of March 2024.
The CBK has collaborated closely with applicants throughout the review process, engaging with other regulators such as the Office of the Data Protection Commissioner to ensure compliance and safeguard consumer interests.
In March 2022, CBK licensed 10 DCPs, followed by 12 more in January 2023 and another 10 in March 2023. With the latest batch of 7, the total number of licensed DCPs has reached 58.
“The focus of the engagements has been on business models, consumer protection, and the fitness and propriety of proposed shareholders, directors, and management. This is to ensure adherence to the relevant laws and, importantly, that the interests of customers are safeguarded,” the CBK stated.
While some applicants have been granted licenses, others are still at various stages in the process, pending the submission of required documentation. The CBK indicated that more licenses might be issued soon, pending the completion of the application requirements.
The CBK remains vigilant against unregulated DCPs, providing a mechanism for the public to report such entities. The need for regulation and oversight of DCPs arose from public outcry over the practices of unregulated providers, which included high costs, unethical debt collection practices, and the abuse of personal information.
Similar concerns have prompted regulators in Tanzania and Nigeria to tighten their oversight of loan app operators. For instance, Tanzania delisted 47 unregistered loan apps from app stores, while Nigeria has introduced measures to sanitize the industry and protect consumers from harassment, defamation, and unethical recovery methods used by some loan providers.
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