Google has removed hundreds of Kenyan-focused loan apps from the Play Store to comply with the new digital lenders policy, which mandates that apps be duly licensed by the Central Bank of Kenya (CBK).
Google directed loan app publishers in November of last year to ensure they fully complied with CBK requirements before being allowed on the Play Store. The tech giant gave the apps a 30-day grace period before taking action, but only recently.
Regulations for Digital Credit Providers (DCPs) went into effect last year and outline the various compliance requirements that lenders must meet. It’s unclear how many apps have been removed from the Google Play Store, but according to TechCrunch, there could be 500 in the finance category.
According to the Central Bank of Kenya, only 22 digital lenders were granted a license in January, including Tala, a PayPal-backed lending app; Pezesha, a B2B embedded lending platform; and Jumo, a fintech provider offering financial services including lending.
Following several reports of data misuse by digital lenders, the new rules were intended to bring the industry under control. CBK has been at the forefront of tightening its regulatory approach in a previously unregulated industry.
Many users were drawn to credit apps because they provided quick, unsecured personal or business loans with little to no collateral requirements. They have been accused, however, of charging exorbitant interest rates, using debt-shaming tactics to recover their money, and sharing customer data with third parties. These are some of the practices that CBK hopes to eliminate through new regulations.