Uhuru Kenyatta Signs into Law New Bill Giving CBK Powers to License, Regulate Digital Lenders

  • President Uhuru Kenyatta has signed into law the Central Bank of Kenya (Amendment) Bill, which gives the bank regulator powers to license digital lenders
  • Uhuru said the bill would ensure the existence of fair and non-discriminatory practices in the credit market
  • The new act will require lenders to seek approval of the Central Bank before setting prices for their loans, mirroring rules set for commercial banks in the country

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President Uhuru Kenyatta has signed into law three critical bills, among them the Central Bank of Kenya (Amendment) Bill, which gives the Central Bank of Kenya powers to license digital lenders.

President Uhuru Kenyatta has approved a law that brings mobile loans under CBK’s control.
President Uhuru Kenyatta in State House Nairobi. Photo: State House Kenya.
Source: Twitter

On Tuesday, December 7, Uhuru signed the bill, in what he said would ensure the existence of fair and non-discriminatory practices in the credit market.

“The amended Central Bank Act, 2021, gives the Central Bank of Kenya powers to license digital lenders in the country as well as ensure the existence of fair and non-discriminatory practices in the credit market,” Uhuru’s office said in a statement.

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The bill mandates Central Bank to control digital lenders and protect borrowers from harmful lending.

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Total control

The new act will require lenders to seek approval of the Central Bank before setting prices for their loans, mirroring rules set for commercial banks in the country.

This signing of the bill marks the first time digital lenders will be under the watch of the Central Bank.

The bill was first proposed by the National Assembly Finance and Planning Committee when it was seeking to empower Central Bank to control the sector.

In a report approved by the Committee’s chair Gladys Wanga dated August 5, the report noted that it had become necessary to develop a sound regulatory framework amid the widespread use of digital credit.

“Currently, there is no legal framework governing digital borrowing platforms. As such, the Central Bank of Kenya will be obligated to ensure that there is a fair and non-discriminatory marketplace for access to credit,” Chairperson of the Finance and National Planning Committee Gladys Wanga said.

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Other bills

Uhuru also signed the Public-Private Partnership Bill and the Trustees (Perpetual Succession) (Amendment) Act into law, all of 2021.

On its part, the new Public-Private Partnerships Act repeals the 2013 legislation by providing an elaborate legal framework to cover both national and county level PPP projects.

Further, the new law expands the role of the private sector in PPP initiatives beyond financing to include construction, operation and maintenance of the projects.

The Trustees (Perpetual Succession) (Amendment) Act, passed by the National Assembly on October 19 this year, seeks to simplify the registration of trusts by, among other reforms, shifting the administration of the process to the new office of the principal registrar of documents.

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Source: Tuko

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