CBK Flags Over 400 Digital Lenders Operating Illegally, To Issue Report To Senate In 2 Weeks

• Central Bank of Kenya (CBK) licenced only 32 Digital Credit Providers (DCPs) to operate in the country
• CBK governor Kamau Thugge told the Senate Committee on Finance that the remaining over 400 digital lenders are yet to be licenced
• However, these DCPs continue to operate without the regulator's approval, posing dangers to thousands of unsuspecting Kenyans

TUKO.co.ke journalist Wycliffe Musalia brings over five years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.

More than 400 digital credit providers (DCPs) in Kenya are operating without approval from the Central Bank of Kenya (CBK).

CBK governor Kamau Thugge told the Senate Committee on Finance that only 32 digital lenders are licenced to operate in the country.

In March 2023, the regulator only approved licences for ten DCPs, urging the remaining DCPs at different stages of the process to submit the requisite documents for approval.

However, eight months down the line, none of the approved lenders have completed the registration process.

How CBK is dealing with rogue digital lenders

The Senators want CBK to speed up the audit process and protect Kenyans from predatory lenders.

"The intention of my statement was to bring to the attention of the Central Bank that there exist lenders that are constantly disregarding the existing laws," said Migori Senator Eddy Oketch.

Governor Thugge, in response, noted that the regulator understands the unfriendly nature of most DCPs to consumers.

He said this prompted the move to bring all players in the sector under the armpit of the watchdog lender.

The regulator disclosed that about two months ago, it engaged various investigative agencies to carry out a thorough investigation of any person conducting business, not only for DCPs but also for mobile money or anything that is deposit-taking perceived.

"We are proactive to find out which entities are doing this kind of business without a licence," said Thugge.

The regulator is expected to submit a detailed audit report of the DCPs operating in the country and measures to curb rogue players in the sector within two weeks.

Era of debt shaming in Kenya

There has been a public outcry over the renewed cases of debt shaming and overexploitation of borrowers by unlicensed digital lenders.

The senators questioned the existence of such lenders and why CBK has yet to take measures against such DCPs.

They highlighted lenders like asset financing firm - Watu Credit - which has been in the limelight for mistreating borrowers.

Kenyans took to social media accusing the firm of stealing the motorbikes once the customer clears the loan.