The Central Bank of Kenya (CBK) has licensed seven more digital lenders to operate in the country.
This brings the number of licensed DCPs to 58 following the licensing of 19 DCPs announced in March 2024.
The CBK says it has received more than 550 applications since March 2022 and has worked closely with the applicants in reviewing their applications.
The regulation process followed questions on business models, consumer protection, and leadership in the then unregulated and rapidly expanding sector.
In a communication the regulator noted that the focus of the engagements has further looked into the fitness and propriety of proposed shareholders, directors, and management.
“Additionally, CBK has engaged other regulators and agencies pertinent to the licensing process, including the Office of the Data Protection Commissioner,” CBK said in a statement.
The regulator added that the increased scrutiny is to ensure adherence to the relevant laws and importantly that the interests of customers are safeguarded.
“We acknowledge the efforts of the applicants and the support of other regulators and agencies in this process,” CBK said.
The licensed DCPs are ED Partners Africa Limited, Ismuk Credit Limited, Mint Credit Limited, Mogo Auto Limited, Payablu Credit Limited, Progressive Credit Limited, Stride Credit Limited
The list if expected to increase as other applicants are at different stages in the process, largely awaiting the submission of requisite documentation.
The licensing and oversight of DCPs as indicated previously, was precipitated by concerns raised by the public about the predatory practices of the unregulated DCPs, and in particular, their high cost, unethical debt collection practices, and the abuse of personal information.
With access to personal loans proving difficult Kenyans have turned to mobile apps forcing major lenders to join the competition.
The number of digital lenders is higher than the 39 banks currently in operation in Kenya.
The market has grown so big with some playing in the big league alongside banks in terms total amount of loans disbursed.
For instance, In June 2024, Tala disclosed that it had disbursed Sh300 billion in loans to Kenyans over the past 10 years.