The Competition Authority of Kenya intends to carry out a sector study into the regulated and unregulated digital credit markets.
The idea is to rein in digital lenders who lure unsavvy
consumers to their traps.
Digital lenders have in the recent past been accused of not making full disclosures, engaging in unauthorized use of personal data and records of their clients or are taking advantage of weak consumer protection laws, to exploit their victims.
The main objective of the study, financed by Innovations for Poverty Action (IPA), is to identify and address potential consumer protection concerns covering both formal and informal digital credit markets.
The Competition Authority seeks to establish size and nature of digital markets, identify potential consumer protection risks and ensure consumers are aware of all terms and conditions as well as product information before taking out a digital loan.
Others issues that CAK wants to look into are how to deal
with fraud in the digital space, safeguard personal data and information as
well as ensure consumers are protected across all the digital platforms.
In a recent Gazette Notice, signed by Wan’gombe Kariuki- Director General, CAK, the organization plans to receive views from the public as well as receive oral and written submissions.
This study has also received technical support together with Financial Sector Deepening (FSD)-Kenya.
Deliberate attempts to sanitize the digital lending space comes after concerns that some of these credit providers could be exploiting members of the public, eager to access credit but unable to meet the stiff conditions set by mainstream commercial banks.