A Bill tabled in the National Assembly seeks to push for the capping of interest on mobile loans.
The petitioner, Boniface Oduor, wants the Central Bank of Kenya (CBK) given the mandate to set the maximum amount of interest mobile lenders can charge whenever they extend loans to the general public.
In the new proposal, the interest charges must be reasonable.
The Banking (Amendment) Bill, 2019 which is sponsored by Kiambu MP Jude Njomo will see mobile money lenders working hand in hand with the CBK governor to ensure that there is no exploitation of the public like it has been in the past.
The new Bill wants the definition of the term loan extended so that it can include a financial guarantee, credit facility, advance and any other form of liability.
Oduor wants the Banking (Amendment) Act number 25 of 2016 reviewed with immediate effect. He argued that mobile lenders have taken advantage of the freedom they have been accorded to charge clients unreasonable interest rates.
“The amendment will clarify what a credit facility is by replacing the term ‘credit facility’ with the word ‘loan’ which is a more suitable and comprehensive term for purposes of section 33B(1),” said Jude Njomo, as quoted by the Standard.
The move comes in the wake of an increasing number of online mobile lenders.