Kenyan President Uhuru Kenyatta has approved a legislative reform that will empower the central bank to supervise digital lenders, giving the bank the authority to rein in lenders who violate customer privacy.
President Uhuru Kenyatta said in a statement that he had signed the Central Bank of Kenya (Amendment) Bill into law.
“The modified Central Bank Act, 2021, empowers the Central Bank of Kenya to license digital lenders in the nation while also ensuring the existence of fair and non-discriminatory practices in the credit sector,” it stated.
The statute empowers the central bank to exert control over lenders in response to complaints from borrowers who can pay annualized interest rates of more than 100%.
“This will give the central bank the authority to oversee digital lenders. This is something that has been long overdue, and we are looking forward to it becoming law and to ourselves filling a void that has been for quite some time “Patrick Njoroge, Governor of the Central Bank, stated.
Njoroge ruled out utilizing the law to limit the interest rates charged by lenders.
Consumers claim that, in addition to charging high-interest rates, digital lenders have violated their data privacy by blasting the contacts they have saved on their mobile phones with calls and texts when they default.
Until recently, dozens of lenders were not protected by any existing regulations.