Borrowers will now be protected from predatory lenders after the parliament cleared a bill that seeks to regulate mobile loan rates and treatment of defaulted credit.
If passed, it will bring tens of digital and mobile lenders under the watch of the Central Bank of Kenya (CBK) after it emerged that millions of youth are listed in the Credit Reference Bureau after failing to pay loans granted by the Mobile lenders.
The Central Bank of Kenya (Amendment) Bill of 2020 is now before the National Assembly committee on Finance and National Planning where Kenyans and other stakeholders will be invited for public participation to give their views before it is taken back to the house for debate and vote.
Many unregulated micro-lenders have invested in Kenya’s credit market in response to the growth in demand for quick loans that has in turn made millions of the borrowers suffer with high interest rates, which rise up to 520 percent when annualized, leading to mounting defaults and an ever ballooning number of defaulters.
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