Digital loan apps have grown in recent years.
In recent months, however, the apps have been accused of many vices, including blatant personal data breaches, harassment, and borrowing at sky-high interest rates.
In Kenya, for example, the apps came under scrutiny following mass reports that they were using illegal means to recover loans, such as B. Harassing customers and using their personal information to shame them to force them to pay.
The issue was raised in Parliament, and lawmakers began drafting legislation that would tame space altogether.
In 2021, the CBK Amendment Act was signed. The bill required the CBK to publish regulations on lending apps by March 23, 2022. The regulations cover aspects of the licensing, governance and lending operations of online lenders.
This also means that the law will be enforceable in a few days. This means that online lending companies must put in place appropriate policies, procedures and systems to ensure the confidentiality of customer information and transactions.
There are other rules on loan recovery, including a case where the law states that agents must not use threats or obscene language when speaking to their clients.
In Nigeria, such developments were not made. However, the country’s federal government has since unleashed its powers to monitor some lending apps that violated customer privacy.
The applications are:
- Easy Credit
- cash cash
- Simply Moni
- Fast choice
The Kenyan case will be interesting because there are dozens, probably more, credit apps that have infiltrated the space. The apps have been successful in their endeavor, albeit illegal in some cases, as M-PESA allows them to instantly send cash to a borrower’s wallet.
It wouldn’t be surprising if some of them closed shop considering the regulations are very strict and they wouldn’t survive in the market.