The Computer Society of Kenya

Since 1986


Digital lenders in Kenya will have to file a self-declaration form and license from the Central Bank of Kenya (CBK) with the tech giant, Google, in order to remain placed under Google Play.

Google last week published new policies that will force mobile loan lenders to disclose the requirements from the banking regulator within a month in order ‘to remain or publish new personal loan apps on Play Store.

Play Store allows web and android users to access applications for their phones. This means millions of short-term borrowers will be unable to download or get an update on the applications from lenders that fail to comply with the new policies.

The American tech firm will also remove hundreds of mobile apps from its platform if they fail to prove their permits to operate before the deadline on December 15.

“Digital Credit Providers (DCP) should complete the DCP registration process and obtain a license from the Central Bank of Kenya (CBK). You must provide a copy of your license from the CBK as part of your declaration,’’ Google said in the Developer Program Policy.

“Currently we only accept declarations and licenses from entities published under the Directory of Digital Credit Providers on the official website of the CBK.”

Apps that do not offer loans directly but offer a platform to other mobile lender apps will be required to provide licenses for the digital lender player they host.

“If you are not directly engaged in money lending activities and are only providing a platform to facilitate money lending by registered DCP(s) to users, you will need to accurately reflect this in the declaration and provide a copy of the DCP license of your respective partner(s),” it added.

Google’s policies come amid heightened scrutiny of the digital loan providers in the market that have pulled millions of individuals and small businesses.

CBK was recently given powers to license and regulate digital lenders under a new law following growing concerns over predatory lending by mobile loan providers, costly interest rates triggering mounting defaults, and the abuse of personal information.

As of September 19, CBK had granted licences to ten players who have been in operation for just over a year, leaving market leaders scrambling to explain their differed approvals.

Digital Lenders Association of Kenya (Dlak) Chair Kevin Mutiso said the regulator has been overwhelmed by the sheer number of applications numbered 288 and expects big players to get approvals.

The licensing process is said to be thorough and interactive with the regulator poring over all the details submitted by the digital loan providers.

The licensing and new policy is expected to reduce mushrooming of rogue digital apps in the market.

Under the new rules, the lenders were supposed to furnish the regulator with a Certificate of Incorporation, Memorandum and Articles of Association of the applicant and that of any significant shareholder.

Directors, chief executives, senior officers and significant shareholders would also undergo a fit and proper test from the regulator which also required disclosure on the source of funds and pricing models.

Google has given all new and existing apps a grace period of at least 30 days from November 16 to comply with the changes, with the policy being fully effective on January 31, 2023.

The tech giant also issued changes in policies for personal loan apps in other countries including Nigeria, India, Indonesia and the Philippines.

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