The proposed Central Bank of Kenya (Amendment) Bill of 2020 introduced to the National Assembly by Bonchari MP Oroo Oyoika in June could not have come at a better time.
By Ndung'u Wa Gathua
The bill has been necessitated by the proliferation of digital lenders in the country even when there has been no substantial legal framework to control their operations.
As a result, many digital credit providers have had to formulate their own regulations to govern their own operations which has seen them face sustained criticism over an array of issues that include accusations of charging high interest rates on loans.
Ironically, even MPs who are tasked with making and amending laws, have been part of the accusatory chorus while doing nothing meaningful to make a substantial legislation to regulate the digital creditors whom many unbanked Kenyans have always sought refuge in during times of financial distress and emergencies.
The highly charged campaign against some digital lenders like OKash had turned into throwing out the baby with the bath water by discounting the positive role that some of these lenders have come to play in financial emancipation of many Kenyans without mainstream banking access.
Oyoika's proposed bill if assented into law will, however, mean that the Central Bank of Kenya (CBK) will henceforth be tasked with regulating digital lenders to ensure fair access to credit, something that the award- winning OKash digital lender has welcomed.
"The bill if it sails through to become a law, will go a long way to bring sanity in the industry as digital borrowers will now understand our operations much better. It will also stamp out quacks thus building borrower confidence in the existing lenders. We say it was long overdue," a top director at OKash has told 254 NewsDay.
Key Takeaways of the Proposed Central Bank of Kenya (Amendment) Bill, 2020
-The Central Bank of Kenya will regulate the conduct of providers of digital financial products and services and financial products and services.
-The Central Bank of Kenya will have an obligation of ensuring that there is a fair and non-discriminatory marketplace for access to credit.
-Central Bank will be expected to license and supervise authorized dealers.
-CBK will also formulate and implement policies that best promote the establishment, regulation and supervision of payment, clearing and settlement systems.
