Digital Lenders Association of Kenya seeks tighter digital loan guidelines
Noel Wandera @Noelwandera5
Digital Lenders Association of Kenya (DLAK) wants Central Bank and the National Treasury to tighten guidelines and regulations to shield consumers from rogue mobile lenders using the regulatory vacuum to swindle cash and personal data from unsuspecting users.
The call comes seven months after the launch of code of conduct by the digital lenders’ lobby in June last year whereby DLAK moved to empower consumers to have access to clear pricing and freedom to make decisions on the loan product that best suit their needs.
“Our goal is to collaborate closely with CBK and the National Treasury to ensure that we protect the consumer, find a win-win solution for taxation and do our part in assisting them in maintain financial stability,” said DLAK’ acting spokesperson Kevin Mutiso ahead of a two-day Fintech Summit 2020 in Nairobi.
The deal also includes dealing with principal, interest, fees, tenure and key timelines to protect consumers.
“We want to draw Kenyan’s attention to the fact that for their financial safety, they should always verify if the lenders they intend to borrow from are listed in DLAK’s web before they share private information with them,” he said.
Kenya is a pioneer in financial inclusion but an explosion of lenders extending credit to the banked and unbanked ropped in players who burden borrowers with high interest rates.
A Financial Sector Deepening found that dozens of mobile lending apps are operating with virtually no regulatory controls, while some apps also set arbitrary fees, and are often malfunctioning—something the association reckons has to be relaxed.
“We strongly believe that close cooperation between leading lenders and regulatory bodies will reinforce the financial market in Kenya and boost its development in the right direction,” commented Duncun Motanya the Chief executive of Zenka Finance, a digital lending institution.