Lending apps have shaken up Kenya’s financial landscape, but they’ve largely gone unregulated — until now. TechCrunch reports President Kenyatta has signed an amended law that gives the country’s Central Bank the power to license and regulate digital lenders. Companies have six months to apply for a license.
Lenders will also have to honor existing consumer and data protection laws. Firms will have to maintain the confidentiality of customer info. They’ll need to disclose pricing, the consequences of defaulting on loans, and outline debt recovery.
Mobile lending has thrived in Kenya and other countries where many residents don’t have bank accounts and can’t take advantage of conventional financing. However, some services have been accused of abusing their audiences with predatory interest rates. While the updated law isn’t guaranteed to end shady practices, it might discourage those lenders and improve trust for would-be customers.
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