Digital Financial Services Association of Kenya (DFSAK) chairman Kevin Mutiso, Parliamentary Committee on Finance and Planning chairman Hon. Francis Kimani Kuria during the rebrand and inauguration of the DFSAK board. Digital credit providers have disbursed Ksh 500 billion in mobile loans to small businesses and households over the last eight years.
Digital services are projected to add an extra $180bn (Sh23 trillion) to Africa's GDP by 2025,
•Since September 17th 2022, Licensing of Digital Credit Providers is still slow as only 22 out of over 400 lenders have been approved.
• DFSAK said it will continue fostering meaningful engagement with government as it celebrates among its key wins
The Digital Lenders Association of Kenya has rebranded to Digital Financial Services Association of Kenya.
The name change comes at a time the association reported disbursing over Sh500 billion in mobile loans to small businesses and households over the last eight years.
According to the lenders, the rebrand is a strategic bid to deepen financial inclusion by bringing together more players and being more responsive to the dynamic customer needs.
“With a robust regulatory environment and increasing consumer interest, we expect the sector to keep deepening financial inclusion in the coming years,” said DFSAK chairman Kevin Mutiso at the Digital Finance Summit 2023 in Nairobi.
More than eight million Kenyans equivalent to a million customers every year have benefitted from mobile micro-loans with an estimated 70 percent borrowing for business reasons.
“We foresee demand for mobile credit rising as small local businesses turn to online marketing platforms and seeking growth funds beyond borders,” Mutiso said
Digital services are projected to add an extra $180bn (Sh23 trillion) to Africa's GDP by 2025, according to the United Nations Conference on Trade and Development (UNCTAD).
Backing this trend is a near doubling of Kenya’s Fintech Start-Ups totalling $574.8 million (Sh71. 7 billion) in 2022 from $292 million (Sh36. 4 billion) in 2021.
Since September 2022 only 22 out of over 400 lenders have been approved by the Central Bank with the association complaining that the process is too slow.
Last year, the High Court allowed Central Bank of Kenya to go on with its plan to control and regulate digital credit providers in the country.
The court dismissed a suit filed by the Association of Microfinance Institutions challenging the Central Bank of Kenya (Amendment) Act, 2021, which led to the introduction of the Central Bank of Kenya (Digital Credit Providers) Regulations, 2022.
The regulations also provide the licensing procedure and compliance requirements for the digital lenders.
The law came in force amid growing concerns about the predatory lending of the firms, with the borrowers not getting full access to information on pricing, punishment for defaults, and recovery of unpaid loans.
The law gives CBK powers to expressly bar digital lenders from using threats, violence, obscene or profane language against customers or their references or contacts for purposes of shaming them in the course of debt collection. By