CBK calls for regulation of mobile-based lenders
- According to CBK Governor Patrick Njoroge, the move will create a level playing field for all lenders in the country regardless of the platform.
- Digital or Mobile-based lenders have come in handy for many Kenyans as they offer loans to customers at a relatively short period of time.
The Central Bank of Kenya (CBK) is calling for seamless regulation of digital lending platforms in the country.
According to CBK Governor Patrick Njoroge, the move will create a level playing field for all lenders in the country regardless of the platform.
“There are principles in that similar products should be regulated in a similar way. If you have banking sort of a function, then you should be regulated like any other,” reiterates Dr. Njoroge.
Digital or Mobile-based lenders have come in handy for many Kenyans as they offer loans to customers at a relatively short period of time.
These lenders began penetrating the market after established commercial banks in the country began sidelining individual borrowers partly due to rate caps.
As much as they have played a role in bridging the financial gap in the country, the Central Bank reckons it’s about time digital lenders were subjected to same laws governing other lenders in the country.
The CBK Boss maintains that the move will ensure citizens are not exploited, going by the current rate of defaulters.
“Principles here relates to one, protecting the consumers… It is not always in the interest of the lender, whoever is doing the mobile lending to provide appropriate outcomes for consumers. There has to be a proper regulation of everyone,” added the CBK governor.
Most mobile-based lenders charge interest rates ranging between 20 to 200 percent with a loan maturity period of 30 days.
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