The Institute of certified public accountants of Kenya wants Central bank of Kenya to set interest rates for digital lender to shield the public from unfair and unfavorable loan terms.
According to ICPAK this will help reduce the number of people defaulting on servicing their loans.
Appearing before the National Assembly Finance Committee the digital lenders association has opposed the bill saying they are not commercial banks.
Kenyans have seen a proliferation of digital lenders offering quick mobile loans to Kenyan at rates and terms heavily skewed to the lenders.
This has led to a spike in loan defaults, leading to many borrowers being blacklisted by the credit reference bureau.
To curb the trend National Assembly has drafted the CBK amendment bill 2020 to among others curb money laundering and terrorism financing and bring digital lenders within the legal purview of Central bank.
In the past the United Nations has urged the government to seal loopholes that are being exploited by criminals to launder money gained illegally.
The bill, if passed, would require all digital lenders to disclose to the CBK the source of their funds, their directors, interest rates and bank details.
The bill also requires digital lenders to be managed by at least two Directors, one of whom must be a Kenyan citizen, and announce their interest rates in any advertisements they publish.
The Institute of certified public accountants of Kenya wants the Central bank of Kenya to set interest rates for digital lenders to shield the public from unfair and unfavorable loan terms.
Appearing before the finance committee during a public participation exercise on the bill, digital lenders association of Kenya opposed the bill terming it punitive.
But ICPAK says the move to regulate digital lenders is long overdue.