Kenya’s central bank governor has called for regulation of the financial technology (fintech) sector, following an increase in predatory lending practices by institutions taking advantage of the unbanked populations.
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 cellphones without a bank account
A draft bill published by the finance ministry last week for review and comment by the public and industry says digital lenders will be licensed by a new Financial Markets Conduct Authority and lenders will be bound by any interest rate caps the Authority sets.
But it is not clear if digital lenders are subject to the current government cap on banks’ interest rates which has slowed private sector credit growth since it was introduced in 2016.
Read more: Africa News