Kenya Online Borrowers Balloon From 200K in 2016 to 2 Million in 2021

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CBK Governor Patrick Njoroge

The Central Bank Amendment Bill, 2021, might be coming soon. The proposal, on the whole, seeks to introduce some sanity in the online lending space as digital loan apps, most of which have a free playing ground without any kind of checks and balances from authorities, have caught the attention of the country.

It has also been clear that the apps masquerade as innovation firms around the popular fintech space, but it is clear as day that they are just brutal loan sharks that continue to rope in unsuspecting Kenyans to credit that they cannot entangle themselves from.

The principal object of this Bill is to amend the Central Bank of Kenya Act to provide for licensing of digital credit service providers, who are not regulated under any other law. The current position is that there is no legal framework governing digital borrowing platforms. As such, the Central Bank of Kenya will have an obligation of ensuring that there is a fair and non-discriminatory marketplace for access to credit – The CBK Amendment


The sentiments have since been echoed by the CBK Governor Patrick Njoroge to the Parliament Finance Committee. For instance, digital lenders were just under 200K back in 2016, but half a decade later, the number has ballooned to over 2 million.

Here are additional regulations that have been stipulated in the proposal:

  1. license digital credit providers
  2. determine capital adequacy requirements for digital credit providers
  3. determine the minimum liquidity requirements for digital credit providers
  4. approve digital channels and business models through which digital credit business may be conducted
  5. supervise digital credit providers
  6. suspend or revoke a license
  7. direct or require such changes as The Bank may consider necessary.

The Governor’s speech to the Committee has also revealed other worrying trends, including the following;

  1. The pandemic has seen household loans (associated with digital lenders) grow to unsustainable levels (8.3 percent of the Kenya household use credit platforms).
  2. Many digital lenders keep coming up every other day (Play Store listing has since revealed that the top most downloaded apps are loan services; in fact, more than half of the top 20 apps are credit services).
  3. The CBK does not know how many online lenders are out there. However, the number is likely more than 100.
  4. The borrowing pattern is worrying; people are using more than one service to repay another. The exercise often collapses because of the high fees involved, as well as the short repayment period.
  5. Customers have been listed by the CRB under erroneous circumstances.
  6. The loan apps do not require any form of security, which is why they are popular among credit-risky Kenyans.

There is some hope that finally, the digital lending space will receive the much-needed regulatory framework that will likely weed out predatory apps to protect Kenyans from loans that they actually don’t need. However, the worry is that such regulations take time, and it might be too late for some Kenyans who have already been erroneously listed by the CRB as bad borrowers.


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Kenn Abuya is a friend of technology, with bias in enterprise and mobile tech. Share your thoughts, tips and hate mail at [email protected]