Today, Google has announced a new policy requiring digital lenders in Kenya to submit proof of license from the Central Bank of Kenya (CBK) in order to be listed on the Google Play Store. This policy is part of an effort to clamp down on rogue loan apps, which are pervasive in the country. Providers who do not have a license from the CBK, but can produce evidence of applying for one, will receive an interim approval for 45 days. If the application is rejected during this period, the interim approval will be rescinded.
Google’s move follows similar efforts in India, Indonesia, and Philippines, where loan apps are also required to have requisite permits from authorities that regulate the financial services sector to be listed on Play Store. In Nigeria, the loan apps are required to have a “verifiable approval letter” from the Federal Competition and Consumer Protection Commission.
22 digital credit providers are currently licensed in Kenya out of 381 applicants, according to the CBK. These lenders must comply with Kenyan laws requiring them to reveal their pricing models, disclose all terms and charges to customers in advance, and notify the regulator before introducing new products or making changes to existing ones. Digital lenders must also disclose the source of their funds and provide evidence of the same as confirmation that they are not engaging in financial crimes like money laundering.
The growing prevalence of loan apps in Kenya and Nigeria has highlighted the need for stringent regulations to protect consumers from rogue lenders and data privacy issues. With Google’s new policy in place, only digital lenders with licenses from the CBK will be able to access the Play Store and borrow money safely. This move is expected to bolster sector growth while weeding out bad actors.
