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CBK licenses 12 more mobile phone lenders

by kenya-tribune

CBK licenses 12 more mobile phone lenders

The Central Bank of Kenya in Nairobi. FILE PHOTO | NMG

The Central Bank of Kenya (CBK) has issued a new round of approvals to 12 players in the lucrative digital loans market bringing the number of licensed digital lenders to 22 after 10 were cleared in September last year.

In a statement to newsrooms on Monday, the apex bank said it had received a total of 381 applications since March last year meaning only five percent of the approval requests have received the regulator’s nod.

“Other applicants are at different stages in the process, largely awaiting the submission of requisite documentation. We urge these applicants to submit the pending documentation expeditiously to enable completion of the review of their applications,” said CBK.

Industry leader Inventure Mobile Limited which trades as Tala has made it to the list after being locked out in the first round last year.

Others on the list include Letshego Kenya Ltd, Natal Tech Company Limited, Pezesha Africa Limited, Natal Tech Company Limited, Ngao Credit Limited and Tenakata Enterprises Limited.

Sevi Innovation Limited, Umoja Fanisi Limited and Zanifu Limited also formed part of the list released on Monday.

The deadline for applications closed on September 17 last year, meaning only those that had applied will continue operating pending the conclusion of their approval process while new entrants will be forced to wait for licenses to start operations.

Under the new rules, the lenders are supposed to furnish the regulator with a Certificate of Incorporation, Memorandum and Articles of Association of the applicant and that of any significant shareholder.

Directors, CEOs, senior officers and significant shareholders are also required to undergo a fit and proper test from the regulator which also required disclosure on the source of funds and pricing models.

In the strict consumer protection rules introduced by the Digital Credit Providers Regulations 2021, CBK is keen on ensuring mobile loan borrowers no longer get pestered by intrusive phone calls to their friends and family when they default.

The digital lenders will also be required to disclose the total charges for their loans, including interest rates, late payment and rollover fees, before disbursing credit to customers.

The new law also gave CBK powers to revoke the licenses of firms which send information about loan defaulters to third parties in name-and-shame tactics meant to recover the money.

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