The Data Commissioner is auditing 40 digital lenders, including Branch and Tala, over misuse of customers’ data, following complaints from the public.
The Office of the Data Protection Commission (ODPC) on Wednesday said it had received 299 complaints from members of the public against the 40, over how their data was handled.
The ODPC said it is now conducting a preliminary documentary assessment and audit on the 40 lenders after complaints were been received regarding their processing of personal data.
“As of September 30, 2022, ODPC had received 1,030 complaints, the office admitted 555 of these cases including 299 which were on digital lenders, representing 54 percent of all cases admitted,” the ODPC stated.
Among the popular DCPs listed are Branch, Tala, Wakanda Credit/Kashway, Zenka digital Ltd, Direct Cash, Flexi Cash, IKASH Connect, M-Credit, Lemon Cash, Sky Pesa and Senti.
The office, which is led by Data Commissioner Immaculate Kassait, has given the lenders less than two weeks to furnish it with requisite documents to facilitate the audit.
“During the audit process, the DCPs (digital lenders) will be required to provide this office with requisite documents by October 18, 2022, failure to which they will be deemed to have failed to cooperate with the office, which is an offence,” the office stated.
The Data Protection (Complaints Handling and Enforcement Procedures) Regulations 2021, which took effect in February, paved the way for people to file complaints and report data breaches to the Data Commissioner.
Kenyans have complained of being phoned by rude credit collectors after their friends or relatives failed to service their loans.
The ODPC’s action comes two weeks after the Central Bank of Kenya (CBK) licensed only 10 DCPs, leaving out 278 others that had applied for the licence, stating that they had not fulfilled all requirements.
CBK Governor Patrick Njoroge last week said the DCPs would not be licensed until they provide the regulator with among other things, details about their source of capital and owners.
“I am looking forward to finally dealing with all these credit providers that use the benefit of the telephone, provide you with credit and then end up harassing you in all sorts of ways,” he said.
“We urge them to quickly deal with the issues that we have pointed out to them. We will not provide them with a licence unless they actually adhere to the specific requirements as per the Act. One of the things that are very clear is that we need to be clear on how they deal with their customers and assurance that their collection habits or methods are ethical. It is their business model that we are interested in,” Dr Njoroge said.