It is a sigh of relief for Kenyans struggling to repay their loans from mobile lending companies after CBK vowed to deregister the loan apps.
The CBK, under the leadership of Governor Patrick Njoroge, has proposed a number of far-reaching reforms that will see it regulate and deregister rogue mobile lenders that have crept into the Kenyan money lending market.
The Central Bank of Kenya (Amendment) Bill of 2020 seeks to regulate mobile loan rates that have seen many Kenyans plunge into huge debts.
Data by Metropol Credit Reference Bureau (CRB) revealed that 14,035,718 Kenyans had been blacklisted by January 2021.
Further, the proposed law seeks to weed out unscrupulous lenders who get involved in unethical practices such as money laundering, illegal acquiring of customer’s private data, and shaming of defaulted borrowers.
The CBK had earlier raised an alarm of the mobile digital platforms which the regulator claimed were easily being used to launder illicit cash.
The regulator, through the new bill, demands all mobile creditors to disclose their source of funds that the institutions are lending to curb on the vice.
Kenya’s credit market has been flooded with investments from various unregulated lenders due to the increase in demand for quick loans.
This led to an increase in the number of defaulters listed with CRBs as Kenyans couldn’t contend with the high-interest rates.
In 2020, more than 3.2 million Kenyans linked to digital loans had been blacklisted as compared to 2.7 million Kenyans in 2019.
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