This is reported to be part of new draft regulations published by the CBK on Thursday, December 23, as it begins to rein in the operations of the previously unregulated lenders.
CBK (Digital Credit Providers) Regulations, 2021, block digital lenders from threatening debtors while recovering their loans. The regulations are now the subject of input from stakeholders until January 21, 2022.
Disclosure of terms and conditions Moreover, the CBK will require digital lenders to provide clear disclosures of the terms and conditions of the loan to the borrower. These include charges, the interest rate to be charged, the total cost of credit, the dates when all charges become payable, and customer complaint handling procedures.
Digital lenders will nevertheless be allowed to list negative credit information about borrowers with Credit Reference Bureaus (CRBs). They, however, must inform borrowers of the planned listing at least 30 days prior. CRB listing Digital lenders will not submit negative credit information of a customer where the credit information does not exceed one thousand shillings. The CBK has directed all unregulated digital credit providers to provide their business details by January 21, 2022.
The credit providers will have six months from the publication of the final regulations to apply for licensing with the CBK. Licenses to the dealers will be provided within 60 days of the application, while the CBK is to certify Directors and Chief Executive Officers (CEOs) to the digital credit providers. The new draft regulations have been powered by the 2021 Central Bank of Kenya (Amendment) Act which brought digital lenders under the scope of CBK regulations.
Uhuru signs bill into law President Uhuru Kenyatta signed into law three critical bills, among them the Central Bank of Kenya (Amendment) Bill, which gave CBK powers to license digital lenders. On Tuesday, December 7, Uhuru signed the bill, in what he said would ensure the existence of fair and non-discriminatory practices in the credit market.
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