Hon. Gladys Wanga committee engages stakeholders over CBK Amendment Bill

The National Assembly’s Departmental Committee on Finance and National Planning chaired by Homabay County MP, Hon Gladys Wanga today continued with stakeholders engagements over the Central Bank (Amendment ) Bill, 2021. Today’s turn was for the main stakeholder; the Central Bank which was led by the Governor, Dr. Patrick Njoroge.

The Bill among other things, defines,”digital credit”, as credit facility or loan offered through digital channels such as the internet, mobile devices, computer devices, applications or any other digital system, approved by the Bank.

In addition, the legislative proposal seeks to empower Central Bank of Kenya to address the issue of unregulated digital lending activities; to regulate and supervise the conduct of the digital lenders. Further it is also expected to help weed out predatory lending.

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If the Bill is approved by the House to become law, digital lenders without operating licences will be barred from business in a bid to push out rogue players amid concerns of unethical practices such as over pricing of loans, illegal mining of customer private data and shaming of borrowers who default on repayment.

This Bill comes in the wake of the proliferation of digital lenders targeting the banked and unbanked alike; saddling borrowers with high interest rates and leaving regulators scrambling to keep up.There has been an outcry of digital lenders mis-using CRBs and listing individuals with credit reference bureaus (CRBs) without cautioning or warning the consumer. This led to CBK barring all unregulated digital and credit only lenders from submitting names of so deemed defaulters to CRBs.

Dr. Njoroge informed the Hon. Wanga led Committee that scores of unregulated digital lenders have flooded the Kenyan market targeting desperate Kenyans with huge appetite for quick loans.

“The argument about willing buyer willing seller doesn’t work here because we have a responsibility to protect consumers and we are taking that responsibility seriously and so should you, we are sure we want to do the right thing”, he explained.

On its part, the Committee underscored the importance of data protection and also pointed out how digital lenders have abused rights of privacy by bombarding relatives and friends with phone calls and messages while asking third parties to enforce repayment.

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