Parliament Close to Approving Bill That Will See CBK Tame Rogue Loan Apps

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Loan Apps Kenya

Soon, the CBK will be able to manage online loan apps that, for a long time, have remained mostly unregulated following a lapse in the law.

Named the Central Bank Amendment Bill, 2021, and first seen a couple of weeks ago, the proposal has been approved by the parliamentary committee on Finance and National Planning.

This effectively means that Central Bank is finally close to taming the space. The report only has to be rechecked by Parliament before it can be signed into law.


Furthermore, a report by the Business Daily has revealed that the Committee has granted the CBK powers to determine the interest rates of online loans. However, it should be noted the bank will not necessarily set the lending rate, but will give lenders a pricing parameter for the loans.

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

A couple of days ago, it became apparent that digital lenders have been running their trade using unethical tactics.

The online loan apps have a short repayment period, usually under a fortnight, and charge insane interest rates.

Customers have been complaining that the teams managing the funds are brutal especially when they don’t pay the money on time.


For instance, the apps use shaming tactics such as calling a borrower’s contact list. Other agents are outright rude and are actually abusive to their customers.

Once approved, the law will see to enforce the following:

  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.

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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]