The clock is ticking on unlicensed digital lenders operating in Kenya. This is as Google- a US-based tech giant plots to lock these Apps from its Play Store on all the android devices
Come January 31st 2023, Google has set conditions to the effect that all digital loan Apps in Kenya must provide a license issued by the Central Bank of Kenya(CBK). Those who fail to do so will have their Apps deleted from the Play Store as required by the CBK amendment Act 2021 on digital lending in Kenya.
Details from the CBK indicate that only 10 out of the 288 digital loan Apps that applied for fresh licenses made the cut after the lapse of the September 17th 2022 deadline.
The law now requires that all Digital Credit Providers (DCP) in Kenya go through a rigorous registration process before obtaining a permit to operate from the Central Bank of Kenya (CBK).
A platform that is not directly engaged in money lending activities and is only providing a platform to facilitate money lending by registered DCP(s) to users will need to accurately reflect this in the declaration while providing a copy of the DCP license of the respective partner(s).
Google said it will only accept declarations and licenses from entities published under the Directory of Digital Credit Providers on the official website of the CBK.
 Kenya joins India, Indonesia, Philippines and Nigeria where regulations have been put in place to provide guidelines on how digital loan Apps should run their businesses.
Google is taking steps to weed out illegal digital lenders in Kenya, who have been locked out by the Central Bank of Kenya, but still operate on Android devices.
Consumers of digital loans have been on the rise in Kenya, forcing the CBK to step in with new regulations to bring sanity to the digital loans industry.
Most digital lenders have been accused of among other things, sharing confidential information about their clients with other unauthorized persons, including names on one’s phone book, hidden costs that are not disclosed at the onset, use of unethical debt collection strategies, lack of disclosure on owners of a digital lending firm and its source of cash, opaque among other unethical business practices.
Unregulated instant loan providers target those on the lower end of the income pyramid-persons that usually have less understanding over the dotted lines in the loan contracts. Most of these Apps also charge huge repayment interest rates-taking advantage of the high appetite for small loan amounts by borrowers who are mostly in the informal sector and are desperate for cash.
