President Uhuru Moves To Curb High Interest Rates By The Digital Lenders In A New Bill. See Conditions..

0 452
Digital loan apps in Kenya have a period of six months to register with the Central Bank of Kenya (CBK) according to an amendment bill signed by President Uhuru Kenyatta.

The President on Tuesday, December 7 at State House, Nairobi assented to the Central Bank of Kenya (Amendment) Bill, Public-Private Partnership Bill, and Trustees (Perpetual Succession) (Amendment) Act, all of 2021.

The amended Central Bank Act, 2021, gives the Central Bank of Kenya powers to license digital lenders in the country as well as ensure the existence of fair and non-discriminatory practices in the credit market.

As a consequence, the Competition Authority of Kenya (CAK) requires digital lenders to provide interest rates, late payment, and rollover fees for their loans before dishing out loans to their customers. Its report revealed that 77 per cent of mobile loan borrowers have been forced to pay penalties and charged to roll over their debts.

Data from the CBK showed that borrowers borrowing digital loans from unregulated lenders rose from 200,000 in 2016 to more than two million in 2019.
The new bill is a huge blow to the digital lenders who have expressed their fearlessness towards regulations.

However, they were sceptical of the government regulating them which might hurt their businesses. Through the Digital Lenders Association, the lenders had started “regulating themselves.”

The CBK in November offered Kenyans a relief by suspending the listing of negative credit information for borrowers with loans below Kenya Shillings (Ksh.) 5 million, whose loans were performing previously, but have become non-performing from October 1, 2021.

Loans below Ksh5 million that fall in arrears from October 1, 2021, to September 30, 2022, will not lead to the “blacklisting” of the borrower on the Credit Reference Bureaus (CRBs). Further, CRBs will not include in any credit report, any negative credit information for loans of a customer less than Ksh5 million submitted to the CRB from October 1, 2020, to September 30, 2021, for a period of 12 months from October 1, 2021, to September 30, 2022
On its part, the new Public-Private Partnerships Act repeals the 2013 legislation by providing an elaborate legal framework to cover both national and county level PPP projects.

Further, the new law expands the role of the private sector in PPP initiatives beyond financing to include construction, operation and maintenance of the projects.

The Trustees (Perpetual Succession) (Amendment) Act, passed by the National Assembly on October 19, 2021, seeks to simplify the registration of trusts by, among other reforms, shifting the administration of the process to the new office of the principal registrar of documents.
Leave a comment