It is a cardinal rule in contracts that the parties are protected by confidentiality clauses and personal data can only be issued on orders of the court.
Digital lending, many analysts have warned, is a threat to the stability of the economy much as they have provided an easy access to money.
Digital lenders found to be involving third parties in contracts with their borrowers to put undue pressure on defaulters should be reined in with as much force and finesse as possible.
It is a cardinal rule in contracts that the parties are protected by confidentiality clauses and personal data can only be issued on orders of the court.
Based on this, it is the right move by the Parliament’s Finance and National Planning Committee is seeking a review of the law to allow the Central Bank of Kenya to revoke the licenses of digital lenders who are exploiting a lacuna in the law to harass families, friends and associates of people owing them.
Digital lending, many analysts have warned, is a threat to the stability of the economy much as they have provided easy access to money, helping households and businesses to respond to emergencies and access deals respectively.
In the review, the MPs are proposing that the CBK have the power to punish the lenders who breach the confidentiality of personal information, especially in the era of data protection.
It is also a great addition by the MPs that the lenders get the nod of the Data Commissioner in line with protecting personal information.
In terms of business growth, digital lenders are ruining their growth using their own success stories.
It is wrong for them to issue personal loans on weak regulations, hoping to make a killing and turn to harass people they are not associated with whatsoever. It is a known warning that you cannot have your cake and eat.
But because these businesses have so far failed, to chart their own growth path, it is the business of the government to protect the public from any anguish tied to harassment from a business pursuing its customers through dangerous groping.
It is also important to stop this “debt shaming” because it is a threat to a business that has room for growth but only requires regulatory guidance to thrive.
We urge the MPs to move with speed in reining in the digital lenders who are known to charge an arm and a leg to give people instant cash and gratification.
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