CBK licenses 29 more digital lenders, taking total to 281

The Central Bank of Kenya (CBK) has authorized 29 additional digital credit providers (DCPs), increasing the total number of regulated lenders in the sector to 281. This licensing expansion follows a previous approval of 25 DCPs in July, bringing the total count of licensed providers to 281. Since March 2022, the CBK has received over 900 applications for digital credit licenses, with the review process focusing on business models, consumer protection measures, and the suitability of proposed shareholders, directors, and management.

The regulator emphasizes the importance of customer interests being safeguarded through adherence to relevant laws. Currently, licensed DCPs have issued 9.6 million loans worth Sh165.1 billion, with products ranging from education and development loans to short-term personal credit, asset financing, and business loans. Most of these services are provided through mobile applications and USSD platforms.

CBK initiated the licensing process to address concerns over unregulated digital lenders, such as excessive borrowing costs, aggressive debt collection, and misuse of customers' personal information. While other applications are still in various stages of processing, the regulator urges applicants to submit the necessary documentation to expedite the review process.

The licensing framework aims to strengthen oversight of digital lenders and enhance consumer protection in the rapidly growing credit market.