Here is what Digital Credit Providers need to know as licensing deadline approaches
The Central Bank of Kenya on Tuesday, May 17, 2022, issued a press release in relation to licensing of Digital Credit Providers (DCPs). The deadline for licensing of DCPs is September 17, 2022.
The announcement by CBK serves to remind DCPs that are yet to apply for permits that they only have four months left before the deadline. Further, CBK reiterates that it will offer no extension after the application deadline. Consequently, DCPs that fail to apply for licensing before the deadline risk ceasing their operations in Kenya.
The table below summarises the key steps and requirements for licensing of DCPs.
Note: Incorporated DCPs will commence the process from stage 2
| Stage 1: Approval of Name | ||
| Steps | Process | |
| Familiarise with licensing requirements of the Central Bank of Kenya (Digital Credit Providers) Regulations, 2022. | ||
| Propose and reserve, in order of preference, at least three business names with the Registrar of Companies. | Online via eCitizen | |
| Submit the proposed names to CBK for approval, in order of preference through an online portal: (https://portalgdi.centralbank.go.ke/ic/builder/rt/CbkSubmitForNameApproval/live/webApps/nameapprovalapp/) | CBK online portal | |
| Proceed to incorporate a limited liability company with the Registrar of Companies using the approved name. | Online via eCitizen | |
| Stage 2: Application for Licence | ||
| Create an online user profile and set a username and password through an online portal. (https://gdi.centralbank.go.ke/login/signin.html) | CBK online portal | |
| Complete an online licence application form. | Print and sign FORM CBK DCP1 | |
| Download the fit and proper forms for Directors, Chief Executive Officer, Senior Officers and Significant Shareholders. | Print and sign FORM CBK DCP 2 and FORM CBK DCP3 | |
| Scan and upload the duly completed application form and fit and proper forms on the CBK online portal. Attach the following supporting documentation:A certified copy of the certificate of incorporation of the applicant.A certified copy of the Memorandum and Articles of Association of the applicant.A certified copy of the Memorandum and Articles of Association of any corporate body that has a significant shareholding (10% or more) in the applicant. A certified copy of the constitutive documents of an unincorporated body that has a significant shareholding (10% or more) in the applicant.Description of the information and communication technology system to be used in the applicant’s operations and an independent assurance on the systems.Description of delivery channels or platforms to be deployed by the applicant.Description of, and terms and conditions of credit products and services which the applicant intends to provide.Agreement with a telecommunication or other service provider for provision of channel or platform for the provision of digital credit.The applicant’s Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) policies and procedures.The applicant’s data protection policies and procedures.The applicant’s consumer redress mechanisms, policies and procedures.Description and evidence of sources of funds to be invested in the applicant.Credit policy, code of ethics and market conduct.The applicant’s pricing model and parameters.Corporate governance policy.Certificate of good conduct, tax compliance certificate and credit reference bureau report for each of the digital credit provider’s individual significant shareholders, directors and senior officers. | CBK online portal | |
| The original documents should be submitted to CBK together with a non-refundable application fee of KES 5,000, payable by banker’s cheque in favour of the Central Bank of Kenya, RTGS or other mode of payment as the CBK may specify. | ||
| CBK will assess the submitted documents for completeness and compliance with the DCP regulations. | ||
| Stage 3: Data Submission Testing and Licensing | ||
| Once CBK is satisfied with the assessment, the applicant will be required to test their ‘data submission’ capability (Regulatory reporting) using Application Programming Interfaces (APIs) with guidance from CBK. | ||
| 12. | Applicant pays the prescribed licence fees of KES 20,000 once they are notified by CBK. | |
| 13. | Upon fulfilment of all the licensing requirements and successful data submission testing, CBK issues a licence to the DCP. | |
| 14. | CBK shall cause the name of the licensed DCP to be published in the Kenya Gazette and in the Bank’s website. |