Senators call for stricter measures on digital lending apps
The Senate is now calling for stricter measures on digital lending applications that they say are milking Kenyans dry.
The Finance and Budget Committee on Tuesday put Central Bank of Kenya (CBK) Governor Patrick Njoroge on the spot for failing to control the apps that are charging Kenyans triple the CBK lending rate.
The Kirinyaga Senator Charles Kibiru-led committee dismissed assertions by Mr. Njoroge that a law needs to be in place for the government to reign in on the lending apps.
Kericho Senator Aaron Cheruiyot wondered how the mobile apps are allowed to operate in the country without any regulations yet they charge “close to 40% interest rates on innocent Kenyans.”
“That this country allows people to use digital apps unregulated, they don’t pay taxes, it looks like Kenya is a criminal enterprise…it’s a criminal haven for people who want to do digital crimes,” Ssid Makunei Senator Mutula Kilonzo Jnr.
Mr. Njoroge acknowledged the fear expressed by the Senators but insisted that the mischief by the lenders will only be cured by a new law being processed.
He said he can’t rule out the possibility of some of the lenders using the apps to launder money and said its part of the reason they stopped the lenders from reporting defaulters to the Credit Reference Bureau (CRB).
“Once the bill is passed we will come out with regulations, but I must say the matter is urgent and I think you are the people that see it more than us, because I am sure people have come to you seeking redress from the damage that have been caused to them,” said the CBK boss.
Most Kenyans have become addicted to mobile lending apps due to their ease in getting money, but with that comes the payment of higher interest rates and the harassment if by any chance one fails to pay within the agreed period.