CBK eases rules for digital borrowers

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CBK eases rules for digital borrowers

CBK eases rules for digital borrowers

The central bank of Kenya has issued a notice requiring digital loans to be treated like normal bank loans. Under the new regulation, mobile loan defaulters will only be blacklisted by the Credit Reference Bureau after six months of non-payment have elapsed.

CBK decided to intervene in the mobile lending space after a study showed that as many as 2.7 million digital borrowers in Kenya were blacklisted due to minor defaults. The study conducted by the CBK team revealed that Credit Reference Bureaus handled bank loans differently from online loans. As a result, most digital borrowers ended up on the CRB list of defaulters.

Online credit companies have often been accused of exploiting borrowers by charging extremely high interest rates and lending to people who are not able to repay the loans. In March, parliamentarians directed the Central Bank to rein in on the mobile lenders.

The lenders recently formed an association, the Digital lenders association of Kenya, with the aim of self-regulating. However, CBK governor Dr. Patrick Njoroge insists that the online platforms must be regulated by an independent authority.

The governor told reporters, “There is no such place for self-regulation. The danger relates to the conflict of interest; this is why you need to have regulation based on specific principles most important being the protection of Wanjiku.”

The new regulation by the Central Bank will take effect in October 2019. The law will only apply to digital lenders licensed by the CBK.

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CBK eases rules for digital borrowers Reviewed by on July 8, 2019 .

CBK eases rules for digital borrowers The central bank of Kenya has issued a notice requiring digital loans to be treated like normal bank loans. Under the new regulation, mobile loan defaulters will only be blacklisted by the Credit Reference Bureau after six months of non-payment have elapsed. CBK decided to intervene in the mobile

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