CBK Stops Digital Lenders From Threatening Borrowers!πŸ‡°πŸ‡ͺ

No more threats from Digital lenders who have been making unauthorised and unsolicited calls or messages to customer’s contact in the quest for debt recovery.

Following a law change, CBK published a new draft regulation on Thursday as it begins to rein in the operations of the previously unregulated lenders.

The digital lenders have been blocked from threatening debtors while recovering loans from them according to the CBK (Digital Credit Providers) Regulations, 2021 which are now the subject of input from stakeholders until January 21.

This new regulation aims to bar use of absence language, improper debt collection tactics and other conduct whose consequence is to harass, oppress or abuse persons in connection with the collection of a debt.

It also aims at limiting the loan interest recoverable from non- performing loans (NPLs).

CBK regulations state that,the maximum amount of interest recoverable from a customer after a default for instance must not surpass the principal owed when the loan becomes non-performing.

Digital lenders will also be required to provide clear disclosures of the terms and conditions of the loan to the borrower including charges and fees, interest rate to be charged, the total cost of credit, the dates when all charges become payable and customer complaint handling procedures.

Before handling their customers names to be listed in the Credit Reference Bureau CRB, Digital lenders must inform borrowers of the planned listing at least 30 days prior.

However, if less than one thousand shillings,digital lenders will not submit negative credit information of a customer.

According to CBK the dateline for all unregulated Digital lenders will be on 21, 2022 January to submit their business details.

Then, it will take at most six months from the day of publication of the final regulations to apply for licensing with CRB.

Licences to the dealers will be issued within 60 days of the application while the CBK is to certify Directors and Chief Executive Officers (CEOs) to the digital credit providers.

This Central Bank Of Kenya CBK act has brought Digital lenders under scope of CBK regulations with its new draft regulation that will see all Digital lenders comply with the set rules and regulations pertaining loans and credit to customers.

The CBK has previously noticed the digital lenders for serving pain to Kenyans by disbursing quick but expensive loans with atrocious debt collection terms attached.

Leave your vote

Leave a comment

Log In

Forgot password?

Don't have an account? Register

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.