All digital lenders operating in Kenya have until September to apply for new licenses, the Central Bank said Tuesday.

Dr. Patrick Njoroge, CBK Governor said this will be in compliance with the Central Bank of Kenya (Amendment) Act, 2021.

The law provides for inter alia the licensing, governance, and credit operations of Digital Credit Providers (DCPs). It further provides for consumer protection, credit information sharing, and elaborates on the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) obligations of DCPs.

“Regulations governing Digital Credit Providers will be gazetted later this month to pave the way for the licensing and oversight of Digital Credit Providers by CBK,” said Dr. Njoroge.

“All previously unregulated Digital Credit Providers will be required to apply to CBK for a license by September 2022 or cease operations.” 

A research study conducted by CIPIT, for instance, revealed that digital credit providers’ applications have access to customers’ phone microphones in order to record audio, calendars which include the permission to add or modify calendar events and email guests without the borrower’s knowledge and continuous access to location data thereupon tracking borrowers’ movements.

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A study ‘Understanding Consumer Protection Risks Faced by Kenyan Digital Finance Users’ by the Competition Authority of Kenya (CAK) and Innovations for Poverty Action (IPA) found out that many borrowers do not consider the costs of loan products and take loans from multiple lenders.

“Pricing of digital loans was not an important factor to borrowers in choosing the lender. The two main considerations are speed of disbursement and ease of repayment,” says the study.

“(Only) 27 percent of digital borrowers were aware of the fees and costs of other digital loan providers in the market.”

Digital Credit: Need and Demand for Consumers’ Financial Literacy


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Community Engagement Editor, connecting audiences with news and promoting diverse voices. He also consults for East African brands on digital strategy.

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