Kenya: Debt Shaming Among Digital Lenders Down 75% On New Law

Nairobi — Cases of harassment and debt shaming by digital lenders have declined by 75 percent, coming on the back of the enactment of the Central Bank Amendment 2021 into law.

The Office of the Data Protection Commissioner (ODPC) and the Digital Financial Services Association of Kenya (DFSAK) attributed the drop to measures instituted to deter such practices.

Under the Central Bank Amendment 2021, which was signed into law by former President Uhuru Kenyatta, the Central Bank of Kenya (CBK) was bestowed with powers to de-register any lender who breached personal information confidentiality by persuing defaulters.

Data Protection Commissioner General Immaculate Kassait noted that the figures, which are the highest in two years, are a good trend in the country.

"The drastic decline in complaints against financial service providers are the highest since the introduction of a regulatory framework by the Central Bank of Kenya two years ago," she said.

On his part, DFSAK chairman Kevin Mutiso lauded the collaboration as a crucial aspect of achieving desirable outcomes.

"We have been working collaboratively with the ODPC to ensure customer protection. This has led to a significant decline in harassment by over 74 percent. The practice of debt shaming is nearly eradicated, and those who continue to harass customers do so at their own peril," he said.

Kenya is currently one of the leading countries in digital lending, driven by a high mobile phone penetration rate and a large unbanked population.

According to statistics from the Central Bank of Kenya (CBK), 51 digital lenders have been licensed to operate in Kenya, while over 500 others have submitted their applications.

Data from DFSAK shows that digital lenders in Kenya serve a total of 8 million customers and lend out between Sh10 billion and Sh15 billion monthly.

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