Loan apps have not been having a good time for the last couple of months – and that is a good thing.
What happened is that these services started being a major concern to customers following their aggressive debt collection methods.
At the same time, some loan apps were blatantly abusing customer private data, where agents could call random persons from a person’s phone address to shame them into repaying their loans.
To this end, Parliament developed the CBK Amendment Bill, 2021, which is attempting to tame the space. Now, loan apps have to register their services, have a physical office, and adhere to a set of privacy laws.
Lenders that don’t do so will not have their services registered.
So far, only a couple of online lenders have been registered, and others are in the process of doing so. Less than 300 lenders submitted their applications to the CBK for review.
The regulator has not released additional apps that have met the registration criteria other than the 10 it announced a couple of weeks ago.
It would also seem that additional checks and balances are being introduced, this time by Google. Google owns Android, which also runs the Google Play Store where apps are hosted. Android is an obvious choice for these apps because it commands numbers, and for a while, Google has not really been thorough, especially in regard to privacy laws.
Thus, Google is introducing additional requirements for personal loan apps targeting users in Kenya and Nigeria.
“Personal loan apps in these two countries must complete declaration forms and submit documentation for our review in order to remain or publish new personal loan apps on Google Play. We are updating our Deceptive Ads policy to state that ads must not simulate or impersonate the user interface of any app features,” says Google in a statement.
This development has taken an extended period to go into effect. Therefore, it is clear that customers will no longer be subject to abuses from these services, because there is now a law protecting them, and Google is taking the extra mile to tame their services.