Kenya cracks down on digital lenders over data privacy issues

guest · Oct 25, 2021

Kenya cracks down on digital lenders over data privacy issues
October 25, 2021
https://techcrunch.com/2021/10/25/kenya-cracks-down-on-digital-lenders-over-data-privacy-issues/

Digital lenders that share personal data of loan defaulters, with third parties, risk license withdrawal in Kenya after lawmakers added a clause – granting the banking regulator the mandate to revoke permits of operators who breach customer confidentiality – to the new law passed by the country’s National Assembly.

Typically, loan apps collect borrowers phone data including contacts and demand access to messages to check the history of mobile money transactions – for credit scoring and as conditions for disbursing loans. Rogue lenders then use some of the contact information collected to recover the loans disbursed in cases where borrowers default. Reports indicate that digital lenders resort to debt shaming tactics, like calling friends and family, to compel their borrowers to repay the loans.
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Kenya’s Data Protection Act requires firms to disclose to customers the reasons for collecting their data. It also ensures that borrowers’ confidential information is safe from infringement by unauthorized parties. This comes as consumer lobbies accuse loan apps of sharing customer information with data and marketing companies.
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Kenya cracks down on digital lenders over data privacy issues

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