Google cracks whip on predatory digital lenders

Google

Internet giant Google has introduced new stringent rules on digital lenders operating in Kenya in new policies aimed at improving the privacy of users and weeding out rogue app developers on Google Play.

Photo credit: File

Internet giant Google has introduced new stringent rules on digital lenders operating in Kenya in new policies aimed at improving the privacy of users and weeding out rogue app developers on Google Play.

The firm wants personal loan apps in the country and Nigeria, which ask users for sensitive text messages and calls permissions before using them to sign declaration forms.

Google says all existing personal loan apps in the two countries must fill out the forms within 30 days to be allowed to remain on the Play Store.

All new personal loan apps will also have to sign the declaration form before they are allowed on Google play.

“We are introducing additional requirements for personal loan apps targeting users in Nigeria and Kenya. Personal loan apps in these two countries must complete declaration forms and submit documentation for our review in order to remain or publish new personal loan apps on Google Play,” said the company.

The move comes at a time digital lenders have increasingly come under the microscope for misusing the private data of users by inundating borrowers, their friends and relatives with calls and text messages about their loans. 

In some instances, relatives and kin are bombarded with calls asking them to plead with the borrower to settle loans taken.

The apps often require users to let them access their calls, SMSs, contacts, and other permissions before they are allowed to use them.

Lenders are also facing additional pressure from regulators after they were placed under the regulatory ambit of the Central Bank of Kenya (CBK).

Selected approval

The Central Bank in September announced it had approved 10 digital lenders who had complied with new digital lending laws and granted them operational licenses.

This is out of the 288 applications for permits that the apex bank had received since March this year.
The Digital Credit Providers (DCPs), which were licensed include Ceres Tech Limited, Getcash Capital Limited, Glando Africa Limited (Trading as Flash Credit Africa), Jijenge Credit Limited, and Kweli Smart Solutions Limited. Others are Mwanzo Credit Limited, MyWagepay Limited, Rewot Ciro Limited, Sevi Innovation Limited and Sokhela Limited.

CBK ordered all unregulated digital lenders who did not apply for the licenses to cease operations.
The Central Bank of Kenya (Amendment) Act, 2021 placed the DCPs under the purview of the CBK to protect borrowers from predatory lending practised by the entities.

The amendment was assented to by former President Uhuru Kenyatta in December last year.