Kenya moves to regulate fintech-fuelled lending craze
Kenya built a reputation as a pioneer of financial inclusion through its early adoption of a mobile money system that enables people to transfer cash and make payments on cell phones without a bank account.
Now, a proliferation of lenders are using the same technology to extend credit to the banked and unbanked alike, saddling borrowers with high interest rates and leaving regulators scrambling to keep up.
This week, the Finance ministry published a draft Bill on financial regulation which covers digital lenders for the first time.
A key aim is to ensure that providers treat retail customers fairly, it said.
“We have a lot of predatory lending out here, which we want to regulate,” Geoffrey Mwau, director general of budget, fiscal and economic affairs at the Treasury, told reporters on Thursday.
As it was for mobile cash, Kenya is something of a test case for the new lending platforms.