Central Bank of Kenya Grants Licences to 7 New Digital Credit Providers

The Central Bank of Kenya (CBK) has granted licences to seven new Digital Credit Providers (DCPs), increasing the total number to 58. This latest addition follows the approval of 19 DCPs in March 2024.

The newly licensed companies are UbaPesa Limited, Stride Credit Limited, Senti Capital Limited, Progressive Credit Limited, Payablu Credit Limited, Mogo Auto Limited, and Mint Credit Limited.

Since March 2022, the CBK has received a total of 550 applications, up from 480 in March 2024. The bank has collaborated with other regulators, like the Office of the Data Protection Commissioner, to thoroughly review these applications.

Before this batch, the CBK had licensed 10 DCPs in September 2022, 12 in January 2023, and another 10 in March 2023, reaching 51 before the latest additions.

“The focus of the engagements has been, inter alia, on business models, consumer protection, and the fitness and propriety of proposed shareholders, directors, and management. This is to ensure adherence to the relevant laws and, importantly, that the interests of customers are safeguarded,” stated the CBK.

While some applicants have received licences, others are still in the process, needing to submit additional documentation. This suggests more licences might be issued soon once these requirements are met.

The CBK is also cracking down on unregulated DCPs, urging the public to report any such providers. This move comes in response to public complaints about unregulated DCPs’ high costs, unethical debt collection practices, and misuse of personal information.

Similar issues are being addressed in Tanzania and Nigeria, where regulators are tightening controls on loan app operators. In Nigeria, authorities have delisted 47 unregistered loan apps and are taking steps to clean up the industry.

In addition to licensing Digital Credit Providers (DCPs), the Central Bank of Kenya (CBK) plans to grant payment licences to fintech startups. This move is part of a review of initial regulations aimed at expanding the country’s payment market. 

This development is attracting interest from notable fintech companies like Flutterwave and Chipper Cash, who are reportedly now considering obtaining licences to operate in Kenya. 

By opening up the market to more fintech startups, the CBK aims to foster innovation and enhance the efficiency of financial transactions in the country. This regulatory shift promises to bring more options and better services to Kenyan consumers, further driving the growth of the fintech sector.