The leading digital lenders in the country have today announced the launch of the Digital Lenders Association of Kenya (DLAK) barely a week after the Banking Charter came into effect with the objective of setting standards in the financial sector.
DLAK Chairperson and Zenka Finance CEO Mr Robert Masinde said that digital lenders came together to form the association to help each other address pain points in the industry, engage with the government on regulations for the sector, and create good practices for industry development.
“A vibrant and diverse digital lending sector has successfully established itself in the country and we feel the time is right to give it a voice and promote global best standards,” Mr Masinde said.
He added that the association will enable digital lenders to speak with a common voice, promote best practices, and influence how the sector develops while promoting the ethical business practice to the benefit of customers.”
The DLAK brings together 12 leading digital-first lenders and other key stakeholders to represent and promote the common interests of digital lenders, consumers, and the digital lending industry.
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The founding members include Tala, Alternative Circle, Stawika Capital, Zenka Finance, MyCredit, Okolea, LPesa, Kopacent, Four Kings Investment T/A Sotiwa, Kuwazo Capital, Mobile Financial Solutions (MFS), and Finance Plan Ltd.
DLAK will initially focus efforts on dealing with the regulatory challenges that presently require attention while promoting ethical business practice in the industry as well as consumer sensitization programmes.
In the mid-term, the Association is targeting activities and initiatives to leverage the combined know-how of the industry in order to foster the quality, safety, and reliability of the services and products for digital lending customers.
“Fancy shylocks”
Speaking last week during the Monetary Policy Committee (MPC) briefing in Nairobi, CBK Governor Patrick Njoroge said he hoped some of the firms operating mobile phone loan applications would be deregistered, “as they are simply fancy shylocks.”
“There has to be a proper regulation, where similar products are regulated in a similar way so long as you are lending to customers or receiving deposits. If you have a banking function, it’s not just about the name; you have to be regulated in the same way or it will lead to arbitrage,” said Dr Njoroge.
