Digital lenders have formed a lobby group as the government moves to regulate the firms on concerns that some of the players were saddling borrowers with expensive debt.
Digital Lenders Association of Kenya (DLAK) chairman Robert Masinde said the lobby that has 12 members will engage the government on regulations and promote responsible borrowing as well as transparency among the players.
The move comes a year after the State published a draft Bill to regulate digital lending and protect Kenyans from exorbitant interest rates.
“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 … DLAK will enable digital lenders to speak with a common voice, promote best practices,” he said.
The lenders include Tala, Alternative Circle, Stawika Capital, Zenka Finance, MyCredit, Okolea, LPesa, Kopacent, Four Kings Investment T/A Sotiwa, Kuwazo Capital, Mobile Financial Solutions and Finance Plan Ltd.
Digital lenders charge an annual interest rate of between 18 per cent and 200 percent on their loans.
A Financial Sector Deepening survey last year showed that digital lending is plagued by a lack of transparency with Kenyans paying fees they did not expect.