Digital lending is one that Kenyans’ has been operating for a number of years but most digital lenders are either abusing defaulters or guarantors hence the new law by the Apex Bank of Kenya.
According the new proposed law by the Central Bank of Kenya, the Apex bank would regulate monthly interest rate that is to be charged by digital mobile lenders.
It will also put a limit on non-performing loans at not more than twice the defaulted credit.
This move by Kenya’s Central Bank was established after digital microlenders were blacklisting loan defaulters on the country’s credit reference bureaus.
COVID-19 Pandemic has raise the increase in borrowers demanding loans relief in Kenya but the Central Bank of Kenya is hoping to introduce the new proposed bill with its main aim to amend the Central Bank of Kenya Act to regulate the conduct of digital financial products and services.
The banking regulator’s responsibility is to then ensure fair access to credit.