Kenya’s Central Bank licenses 19 new digital credit providers, total rises to 51

The Central Bank of Kenya (CBK) has granted licenses to 19 new digital credit providers (DCPs), raising the total number of registered firms to 51. As of March 2023, the CBK revealed it had received 480 applications for licensing to comply with Section 59(2) of the CBK Act.

The recently registered companies include Autocheck, Azura, Chapeo, Chime, Creditarea, Decimal, Dexintec, Factorhouse, Fezotech, Fortune, Lipa Later, Lobelitec, Maralal Ledger, Marble Capital, MKM Capital, Pi Capital, Senti Capital, Ubapesa, and Zillions Credit.

In a statement issued on March 6, 2024, the regulator mentioned that all the newly licensed credit providers were also duly registered with other regulatory authorities like the Office of the Data Protection Commissioner. This ensures their compliance with the regulations governing the digital lending space.

The CBK is engaging with other relevant regulators and agencies to ensure that the business model, consumer protection measures, and governance of the prospective firms meet the required standards. The CBK emphasized its commitment to ensuring that all authorized lenders abide by the applicable laws and safeguard their customers’ interests.

This new move, following Kenyans’ struggle with high credit costs from banks and other financial sector players, is anticipated to increase competition in the country’s digital lending landscape while maintaining high service delivery standards.

After reports of customer data exploitation and extremely high loan interest rates, the Central Bank of Kenya (CBK) made it mandatory for all digital credit providers (DCPs) to obtain licenses to operate by 2022. This decision was introduced to exert greater regulatory control over Kenya’s financial sector, followed by a six-month compulsory registration period.

This latest announcement reflects the fourth round of licensing. In the first round, the CBK approved 10 DCPs in September 2022, followed by 12 DCPs in the second round in January 2023, and another 10 DCPs in the third round in March 2023.According to the central bank, additional applicants are at different phases of the registration process, primarily waiting for the submission of necessary documentation.

As such, more DCPs are expected to be licensed in the future. The CBK has encouraged these applicants to promptly furnish the required paperwork to facilitate the completion of their application reviews.