Data Protection Office Reports a 75% Decline in Harassment Cases by Digital Lenders against Borrowers

By Catherine Muema Last updated May 16, 2024

Data Protection Commissioner, Immaculate Kassait with Kevin Mutiso during the DFSAK Digital Credit Breakfast

By Shadrack Nyakoe

Cases of harassment and debt shaming by digital lenders have declined following the joint efforts to bring sanity to the sector, led by the Office of the Data Protection Commissioner and the Digital Financial Services Association of Kenya (DFSAK).

During a sensitization session for lenders regarding the compliance guidance notes at the Serena Hotel in Nairobi, the Data Protection Commissioner, Immaculate Kassait, noted a drastic decline in complaints against financial service providers since the introduction of a regulatory framework by the Central Bank of Kenya two years ago.

The German International Cooperation (GIZ) and Financial Sector Deepening (FSD) co-sponsored the implementation of guidance notes to assist digital lenders in complying with regulations, particularly in the area of data protection.

“We have been working collaboratively with the ODPC to ensure customer protection. This has led to a significant decline in harassment by over 74 percent. The practice of debt shaming is nearly eradicated, and those who continue to harass customers do so at their own peril,” said Kevin Mutiso, Chairman of DFSAK. “A collaborative approach between regulators and the industry is crucial to achieving mutually desired outcomes. The guidance from the ODPC is a true case study of how such collaboration is essential.”

Kenya stands at the forefront of the Digital Lending Revolution in Africa.

Driven by a high mobile phone penetration rate and a large unbanked population, digital lending platforms have emerged as game-changers, offering financial inclusion and access to credit for millions.

However, this dynamic landscape is continuously evolving, facing challenges and embracing new opportunities while navigating a recently introduced regulatory framework.

The law requires digital lenders to keep records of borrower consent, notices provided to customers, and maintain a data retention schedule for all personal data.

Data from DFSAK shows that digital lenders in Kenya serve a total of 8 million customers and lend out between Sh10 billion to Sh15 billion per month.

According to statistics from the Central Bank of Kenya (CBK), 51 digital lenders have been licensed to operate in Kenya, while over 500 others have submitted their applications.