Digital lender harassment has declined by 75%, Data Protection Commissioner reveals

Cases of harassment and debt shaming by digital lenders have plummeted by 75% since 2022, Data Protection Commissioner Immaculate Kassait has revealed.

Speaking in Nairobi on Wednesday during a sensitization session regarding compliance guidance notes for digital credit providers, Kassait attributed the significant decline to the Central Bank of Kenya (CBK) implementing regulatory measures on the same two years ago.

Recently, the German International Cooperation (GIZ) and Financial Sector Deepening (FSD) co-sponsored the implementation of guidance notes to assist digital lenders in complying with regulations, particularly in the area of data protection.

Kassait further lauded digital lenders for adhering to the rigorous regulatory standards and prioritizing the protection of customer data.

"The initiative demonstrates the commitment of the Digital Financial Services Association of Kenya (DFSAK) to uphold the highest standards of regulatory compliance with the aim of safeguarding personal data and upholding dignity of human beings," said Kassait.

"The Office has embarked on an assessment of digital credit lenders; from an initial assessment undertaken by the office, there is still more that needs to be done by the digital credit providers to fully demonstrate compliance with the Data Protection Act."

On his part, DFSAK Chairman Kevin Mutiso stressed the significance of collaboration between regulators and industry stakeholders to effectively tackle challenges within the digital credit sector.

"We have been working collaboratively with the ODPC to ensure customer protection. This has led to a significant decline in harassment by over 74 percent. The practice of debt shaming is nearly eradicated, and those who continue to harass customers do so at their own peril," he said.

"A collaborative approach between regulators and the industry is crucial to achieving mutually desired outcomes. The guidance from the ODPC is a true case study of how such collaboration is essential."

With a high rate of mobile phone usage and a sizable unbanked population, digital lending platforms have emerged as transformative tools in Kenya, providing financial inclusion and credit access to millions.

Data from DFSAK shows that digital lenders in Kenya serve a total of 8 million customers and lend out between Ksh.10 billion to Ksh.15 billion per month.