Kenya’s Digital Lenders Mull at Self Regulation

David Indeje is Khusoko’s Digital Editor, covering East African markets.
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Digital Lenders Association of Kenya (DLAK) have signed a code of conduct that will help the body to self regulate in the dynamic digital lending landscape.

According to the DLAK chairman Robert Masinde, “The rules and regulations that we are planning to adapt are a self-regulation initiative for the benefit of our consumers.”

Part of the conduct is to cap initial lending at a maximum of KSh4,000 to customers with no credit history.

“Permission should be requested for individual sets of data that the borrower is granting access to. In the case of shared contact networks between borrowers, such as referrals, no data pre or post loan application should be shared between borrowers,” reads the code of conduct in part.

DLAK consists of 12 founding members: Tala, Alternative Circle, Stawika Capital, Zenka Finance, MyCredit, Okolea, LPesa, Kopacent, FourKings Investment Sotiwa, Mobile Financial Solutions, Kuwazo Capital and Finance Plan Limited.

Under the new rules and regulations, consumers will have access to clear pricing, empowering them to make informed decisions on the loan product that best meets their needs.


This will include details such as the principal, interest, fees, tenure and calendars to indicate due to dates for payment when past due periods begin and other key timelines.

The Central Bank of Kenya has raised concerns over the increasing number of mobile loan apps that end up exploiting Kenyans thus calling for their regulation.

“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,” said Central Bank of Kenya (CBK) Governor Patrick Njoroge in Monetary Policy Committee (MPC) post briefing on May 28, 2019.

“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 proper regulation of everyone,” added the CBK governor.

David Indeje is Khusoko’s Digital Editor, covering East African markets.

In my role as Community Engagement Editor For Khusoko, I care about our audience. engaging them, getting news delivered to them across a variety of platforms, and expanding the diversity of voices on our website.

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