NAIROBI, Kenya — The National Treasury has unveiled tougher measures aimed at cracking down on predatory digital lenders, as the government steps up efforts to protect borrowers from exploitative practices in the fast‑growing digital credit market.
Speaking before the Senate on Wednesday, the Treasury Cabinet Secretary John Mbadi announced that digital lending platforms that violate regulatory requirements will face hefty fines and potential licence revocation.
CS Mbadi noted that sanctions on non‑compliant lenders will be significantly increased, with fines rising from Sh500,000 to Sh2 million for breaches of the Banking Act and related regulations.
If lenders continue to charge exploitative interest rates, engage in unethical loan recovery practices, or fail to comply with licensing requirements, they could risk having their operating licences revoked entirely.
The tougher stance follows growing concerns from lawmakers about digital lenders who impose excessively high interest rates, violate consumer data privacy, and use aggressive recovery tactics that put undue pressure on borrowers.
During the Senate session, senators pressed the Treasury to act against lenders whose effective charges far exceed acceptable norms and who reportedly harass borrowers and their contacts when payments are missed.
CS Mbadi also said that digital lenders must have their pricing modules approved to ensure they follow legal standards, including the in duplum rule, which legally caps interest at the amount of the principal, and other statutory requirements.
The Ministry, in collaboration with the Central Bank of Kenya (CBK), also plans to clamp down on microfinance institutions offering logbook or asset‑backed loans at exploitative rates, warning that all finance providers must operate within the law.
