Regulating Digital Lenders

Who regulates regulators in this country? There are cases where regulators make baffling decisions or engages in decision delays that are very harmful to the business and the economy.

For example, there is this issue of licensing of digital lenders. CBK has so far only licensed 10 digital lenders out of 278. CBK's own regulations require it to issue the licences within 60 days. Yet the applications are now pending since September last year.

Surprisingly, the ten who have been licensed are recent market entrants who have been in operation for less than two years. The more established digital lenders are yet to be licensed.

The unlicensed digital lenders are banned from Google Play Store and risk serious reputational damage.

Why is CBK acting with this kind of impunity? Isn't this a blatant abuse of power? The licensed players are getting an advantage over the unlicensed ones. What criteria is being used to issue the licenses?

These digital lenders employ Kenyans and have customers in this country. Why ruin their businesses through regulatory opaqueness and laxity?

CBK must make decisions on whether or not to license those digital lenders who have applied. The requirement for CBK's regulation wasn't meant to destroy digital lenders. It was meant to protect consumers from predatory lending and unethical behaviour such as debt shaming.

Parliament should act with speed and ensure CBK doesn't abuse its regulatory powers by favouring some licensees over others. We can't entertain actions that risk jobs in such a tough economic environment.

Author: Ephraim Njega,?(MBA, BCom, (UoN) Dip(I) MIS(KIM))