Is your loan lender licensed?

Central Bank of Kenya (photo-courtesy)
Central Bank of Kenya (photo-courtesy)

Netizens have expressed mixed reactions after a report by the Central Bank of Kenya (CBK) revealed that only 10 mobile loan providers have so far been licensed to conduct business in Kenya.

Through their social media accounts, some have shown excitement and surprise noting that the popular Tala, Zenka and O-kash apps have not yet been licensed.

In an attempt to regulate this sector, the former President Uhuru Kenyatta last December approved a law that allowed the Central Bank to regulate digital lenders. This move gave the bank the power to reign in lenders who violate consumer privacy.

The digital loan companies’ also known as Digital Credit Providers (DCP) had 6 months to apply for a license after an announcement by CBK in March earlier this year. Failure to apply for or get this license means that the companies will be operating illegally.

CBK announced that a total of 288 applications were submitted during the 6 month period. The regulator however has clarified that other providers will be listed as the vetting process still continues for those who abided with the September 17 application deadline.

The ten applicants, who have now been listed, according to the CBK Act and the Regulations, include Ceres Tech Limited, Getcash Capital Limited, Glando Africa Limited (Trading as Flash Credit Africa), Jijenge Credit Limited, Kweli Smart Solutions Limited, Mwanzo Credit Limited, MyWagepay Limited, Rewot Ciro Limited, Sevi Innovation Limited and Sokhela Limited.

The new rules for licensing

Under the new rules, providers are required to submit a certificate of incorporation, memorandum and articles of association of the applicant and shareholders. Besides, they should also disclose the total charges for their loans, interest rates, late payments and rollover fees.

By Elizabeth Chege