What is the Method to Obtain Kenyan Digital Credit?
Kenyans have been at the forefront of creating revolutionary solutions to promote financial inclusion and economic prosperity since Mpesa was introduced in 2007.
Applying for a Kenyan Digital Card Provider (DCP) license is a method including the following steps.
- Getting a Name Approval
Getting the name of your DCP approved remains the first step towards obtaining the said licence. Every DCP targets a specified demographic and has a distinct value proposition, so when selecting a name, you want it to appeal to them. For instance, you may wish to rename your DCP “SME-Pesa” if you are targeting SMEs.
- High-level Summary
A high-level brief that covers your target market, delivery and distribution channels, business plans, operational models, and the DCP’s unique value proposition is what you will need next.
This is meant to separate the “jokers” from the serious lot and assess the DCP’s level of sincerity and ability to provide digital lending services.
To avoid instances when a digital lending business is exploited as a source of money laundering, one must also provide a commissioned declaration with the outlining brief of their fund sources.
- Submitting the Application for Licence
The actual application to the Central Bank of Kenya is the third and last step. This is the most delicate section since most candidates are rejected here for failing to provide necessary supporting documents.
A copy of the companies’ data protection and the dispute resolution policies, the Fit& Proper forms to be completed by the DCP’s proposed Directors, the pertinent agreements with Telecommunications Service Providers, and the DCP’s terms and conditions are among the documents required in this process.
- Data Submission and Acquisition Of License
Once all the above-mentioned conditions have been achieved successfully, the CBK will ask you to perform a particular run of your “regulatory reporting.” After everything is finished, the applicant will receive their DCP licence and pay the Kshs 20,000 licensing fees.
The emergence of a digital lending platform in Kenya, covering M-Shwari, Tala, and KCB Mpesa, is one of the examples of their innovation. Unbanked Kenyans have now access to unsecured loans that are transmitted straight to their phones because of these mobile-operated websites.
