Summary:

• Google removed around 500 loan apps from its Play Store in Kenya for lacking proper licenses to operate as lenders in the country.
• A new regulation introduced in January required online lenders to obtain documentation from the Central Bank of Kenya.
• Only 22 out of 381 digital lenders applied for the license and received it.

Last week, Google removed hundreds of loan apps targeting Kenyans from Play Store because they lacked proper license to operate as lenders in the region.

The country passed a new regulation in January 2023 under its Digital Credit Providers (DCP) policy, which mandated that online lenders get documentation from the Central Bank of Kenya.

A TechCrunch article said that the number of apps taken down was about 500 including popular ones like MoKash and Okash (which is run by Nigerian fintech Opay).

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Following the regulation going into effect in January, the country’s apex bank said that 381 digital lenders applied for the license but only 22 of them received it.

Tala, Jumo, and Pezesha were some of the few loan apps to obtain the operating license. To remain on the store, the other apps needed to submit a declaration that they were waiting on approval, and they would be allowed to stay on for only 45 days more.

Kenya had moved on digital loan apps after they became notorious for activities such as charging high interest rates, offering quick and unsecure loans, stealing users’ data and sharing them with third parties, and applying debt-shaming tactics to recover their money.

In putting the regulations in place, Kenyan financial regulators will be able to work with approved digital lenders to ensure that customer data and privacy are protected. It will also help to monitor loan activities, providing important data on how the industry is moving.

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