Google’s new policy that requires digital lenders in Kenya to provide proof of license to operate in the East African country goes into effect today. The policy aims to crack down on fraudulent loan apps prevalent in the country.
This means that only providers with a license from the country’s premier bank, the Central Bank of Kenya (CBK), will be listed on Google’s digital distribution service, the Play Store.
Digital lenders whose applications have not yet received a green light from the CBK and are able to provide proof of that will also obtain provisional approval from Google, but only for a period of 45 days. After this period, the unlicensed provider will be required to resubmit a declaration stating that approval from the CBK is still pending.
A Google spokesperson told TechCrunch that if the license application is denied within 45 days, the provisional approval will be immediately revoked.
Google’s move to restrict unregulated loan apps in Kenya follows similar efforts in India, Indonesia and the Philippines. In these regions, providers are still required to obtain the necessary permits to list on the Play Store from authorities regulating the financial services sector.
In Nigeria, loan apps must obtain a “verifiable letter of approval” from the Federal Competition and Consumer Protection Commission. The Federal Competition and Consumer Protection Commission set a rule last year that requires loan apps to declare fees, receive feedback, and indicate how to resolve complaints. requirements.
Out of 381 digital credit providers, 22 digital credit providers are licensed in Kenya.
Only 22 digital lenders, including Tala, a Pay-pal-backed loan app. According to his CBK update yesterday, Pezesha, a lending platform embedded in B2B, and his Jumo, a fintech that provides financial services, including lending, have received licenses out of 381 applications so far. I am getting
Kenya and Nigeria are Africa’s major tech hubs and are witnessing a proliferation of loan apps, offering unsecured personal or business loans quickly. A lax scrutiny process has led to the rise of rogue operators and forced authorities to take appropriate measures to protect their citizens.
In Kenya, Google’s new policy calls for avoiding the use of intimidation and default tactics, such as posting personal information on online forums, unauthorized calls or messages to customers, and accessing contact lists. We are following the new regulatory environment that is demanding of vendors. For enforcement in case of default.
The loan app collects the borrower’s phone data, including contact information, requests access to messages, and sees the history of mobile money transactions. This is used as a condition for credit scoring and loan payments. Fraudulent lenders share some contact information with third party debt collectors without prior consent.
Kenyan law requires loan apps to reveal their pricing model and disclose all terms and fees to their customers in advance. They must also notify regulators before introducing new products or making changes to existing products.
In addition, you must disclose the source of your funds and provide evidence to confirm that you are not involved in financial crimes such as money laundering.
