The Central Bank of Kenya (CBK) has licensed 27 extra Digital Credit Providers (DCPs) as of October 2024. This move increases the total number of licensed DCPs to 85. Since the CBK began regulating the sector in 2022, it has received over 730 applications, with many still under review due to pending documentation from applicants.

The CBK regulation of digital lenders was informed by concerns over predatory practices, including unethical debt collection methods, high interest rates, and the misuse of personal information. By licensing these lenders, the CBK aims to ensure they adhere to consumer protection laws and operate ethically.

Despite these measures, concerns remain about the security of digital lending platforms. Cybersecurity experts warn that many loan apps are vulnerable to attacks due to inadequate oversight during development, posing risks to users’ data.

Users are advised to be cautious when sharing personal information on these platforms. Some credit lenders have previously misused their clients’ data such as contacting their relatives and listing their names on CRB without their knowledge.

This regulation is part of broader efforts to enhance financial inclusion while protecting consumers from unethical practices in the country’s growing digital lending market.

While the Central Bank of Kenya (CBK) has made a significant step in approving several other digital lenders, many more are still waiting to be licensed. However, some players, especially peer-to-peer lenders are still unsure under which category they fall. There are currently no clear guidelines in the country as to how such platforms should operate.