The Central Bank of Kenya (CBK) is set to gain regulatory control over buy-now-pay-later (BNPL) companies if the proposed Business Laws (Amendment) Bill, 2024 is approved by Parliament. This bill amends existing laws to include BNPL arrangements, providing the CBK with the authority to determine pricing and oversee these credit providers, which include both secured and unsecured loan issuers. The move comes in response to growing customer complaints about predatory lending practices within the BNPL sector, prompting calls from lawmakers for tighter regulations. The bill aims to eliminate ambiguity regarding the status of BNPL businesses, ensuring they are licensed and monitored under the CBK's jurisdiction. The introduction of this legislation follows the CBK's previous efforts to regulate digital credit providers, reflecting a broader initiative to enhance consumer protection in the financial sector. The new regulations are expected to reshape the BNPL landscape in Kenya, addressing concerns about high-interest rates and exploitation of vulnerable borrowers.
Read the full article here.