Reports that the Central Bank of Kenya (CBK) has delayed giving some of the micro-lenders the licences to operate in the country bodes ill for the country's business environment.
Getting a regulatory nod ranks top among the metrics used to measure a country's ease of doing business.
We understand that the CBK is trying to sanitise the sector that has been blamed for predatory lending and breach of consumers’ privacy in recent years.
However, we believe that the process should be made clearer and easy for all applicants.
Uncertainty in the sector will kill the few gains in the sector such as increased access to credit for millions of Kenyans snubbed by banks.
That the CBK has not updated the investors on the status of their applications since September is bad for investment in an economy that is struggling to create more jobs and increase State revenues through taxes.
According to CBK (Digital Credit Providers) Regulations, 2022, the central bank was supposed to issue licences to qualifying digital lenders within 60 days of application.
The delay has seen all the lenders, whose applications are still pending, get barred from Google’s Playstore which allows users to access the services like borrowing and repaying loans.
We urge the regulator to fast-track the process and in cases where the lenders do not meet the requirements, the same should be communicated back in good time.
For their part, the companies should practise responsible lending and cease unorthodox practices that have driven many borrowers into death traps.
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