The Central Bank of Kenya (CBK) has taken another significant step in regulating the burgeoning digital credit sector by issuing operating licenses to seven new Digital Credit Providers (DCPs). This move brings the total number of licensed DCPs in the country to 58, marking a substantial increase in the regulated digital lending space.
The newly licensed providers include UbaPesa, Stride Credit, Senti Capital, Progressive Credit, Payablu Credit, Mogo Auto, and Mint Credit. These additions come after a rigorous vetting process that involved collaboration with other regulatory bodies, including the Office of the Data Protection Commissioner.
In a statement, the CBK emphasized that the licensing process focused on evaluating business models, ensuring consumer protection, and assessing the fitness and propriety of proposed shareholders, directors, and management teams.
This development follows concerns raised by digital lenders last year regarding delays in obtaining operational licenses. The CBK (Digital Credit Providers) Regulations, 2022 mandated all digital lenders to seek fresh licensing, a process that began in March 2022. Since then, the CBK has received over 550 applications, highlighting the sector’s rapid growth and the regulator’s commitment to maintaining order in the industry.
The digital lending landscape in Kenya remains dominated by established players. Recent data from the Competition Authority of Kenya reveals that Safaricom and NCBA Bank-owned products, Fuliza and M-Shwari, command a 59% market share. KCB’s Mpesa follows with 15%, while Tala and Branch hold 13% and 9% respectively.
As the CBK continues to process applications and issue licenses, the digital credit market in Kenya is expected to become more diverse and regulated, potentially leading to improved consumer protection and financial inclusion.
The expansion of licensed DCPs comes at a time when digital lending is playing an increasingly crucial role in Kenya’s financial ecosystem, offering quick access to credit for individuals and small businesses. However, it also underscores the need for continued oversight to ensure responsible lending practices and protect consumer interests in this fast-evolving sector.
ALSO READ; https://financialday.co.ke/2795/cbk-licenses-19-more-digital-credit-providers/
