New entrants get first CBK digital lending licenses

New entrants in the digital lending sphere have been the first to receive licensing from the Central Bank of Kenya (CBK).

On Monday, the banking sector regulator indicated that it has so far licensed 10 applicants as digital credit providers out of 288 applications since March 2022.

The 10 licensed operators represents a majority of new entrants and local players including Ceres Tech, Getcash Capital, Giando Africa (Flash Credit), Jijenge Credit, Kweli Smart Solutions, Mwanzo Credit, My Wagepay Limiited, Rewot Ciro, Sevi Innovation and Sokohela.

“Other applicants are at different stages in this process, largely awaiting the submission of requisite documentation. We urge these applicants to submit the pending documentation expeditiously to enable completion of the review of their applications,” CBK said in a statement.

“All other unregulated digital credit providers (DCPs) that did not apply for licensing must cease and desist from conducting digital credit business.”

Legacy digital credit providers and foreign owned DCPs such as Tala and Okolea are still waiting to receive licensing form the CBK as it process the remainder of the 278 applications.

Applications by the legacy and foreign based players have been intensive with much more documentation required by the sector regulator.

“An existing player be making 30 or 40 submission of documents including audited accounts whereas a new player could be submitting five or six documents. I wouldn’t want to speculate but I do expect there could be a list of new licensees in a periodic manner until the CBK is done will all the applications,” Chairperson to the Digital Financial Services Association of Kenya (DSAK), formerly DLAK, Kevin Mutiso told Citizen Digital.

All digital credit providers had until Saturday last week to apply for licensing from the CBK.

Mutiso terms the licensing of the providers as a new chapter for the industry even as he expects a consolidation in the number of players plying the space in future.

“I think the industry by the mere fact it has now been regulated has generated confidence across the board. As the list demonstrates, there are a lot of new entrants coming to the market. Like any competitive market, confidence is a good thing,” he added.

“Obviously, some will grow faster than other while others won’t work. In two years, I wouldn’t expect us to have 288 digital lenders."