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{
"id": 1097476,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1097476/?format=api",
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"type": "speech",
"speaker_name": "Homa Bay CWR, ODM",
"speaker_title": "Hon. (Ms.) Gladys Wanga",
"speaker": {
"id": 590,
"legal_name": "Gladys Atieno Nyasuna",
"slug": "gladys-atieno-nyasuna"
},
"content": "It is important to give a brief background on the genesis of this Bill. As you may recall, this Bill was initially sponsored by the late Hon. John Oroo Oyioka. It was then the Central Bank of Kenya (Amendment) Bill (National Assembly Bill No.21 of 2020). At the time of the demise of the late John Oroo Oyioka, and may the Lord rest his soul in eternal peace, he was the Member for Bonchari. The Departmental Committee on Finance and National Planning had already engaged with various stakeholders. We had conducted public participation on this amendment Bill. But then, he passed on. After consultations with the Speaker, the Central Bank of Kenya and other stakeholders, we agreed that in his honour, we would republish the Bill as a Committee Bill carried by myself as the Chair. That is when it was republished as the Central Bank (Amendment) Bill (National Assembly Bill No. 10 of 2021). So, I just wanted to recognise the amount of work and the passion that the late Hon. John Oroo Oyioka put into this Bill. It was his baby. It was a matter for which he was extremely passionate. I am sure that, wherever he is, he is happy that the Departmental Committee on Finance and National Planning has since taken up this amendment Bill. This amendment Bill broadly speaks to regulation of the digital lending sector. This is a nascent sector. It is new. It is serving the unreached and underserved. As the digital lending space is growing, there is need to begin to regulate the sector. People are happy to borrow. Right now, if you look at the phones of many young people and even older people, they have up to 10 or 15 borrowing apps. They borrow from one to pay the other. When the other one is due, they borrow from a newer one to pay the older one. Therefore, there is a crisis of over-indebtedness that has emerged, especially among our younger population. It is because of the availability of this credit. Over and above that, there also has been public concern around the issue of the pricing of these products. The issue of pricing is also a key issue. As we were conducting public participation, it emerged that some of these lenders charge interests as high as 150 per cent. Therefore, when people are not able to cope with the interest rate, you just take your line, throw it away, buy a new line and begin to use that line. If you look at the interest rate that is charged on Fuliza and Fuliza is one of the regulated ones, it is high. I do not know whether you have Fuliza on your phones. I have Fuliza on my phone. Every time I want to send money to a funeral or another pressing matter and I do not have money on my M-Pesa, I just go to Fuliza and I send it. But if you look at the interest rates that are charged on that product, they are nowhere near the regular rates. There is even concern around, not just about the unregulated sector of digital lending but also even the regulated sector lenders, that when they use the digital platform, the interest rates become much higher than when they are lending directly over the counter. Those are some of the concerns. Then there is a big concern around the issue of data protection. Data protection is a major issue. Kenyans have the right to privacy of their data. But if you borrow from a digital lender, they mine the data. Once they mine the data, they can even access all numbers on your phonebook. Hon. Sankok here might be surprised. Because he has my number, they might send him a message that Hon. Gladys Wanga borrowed Kshs1,000 and three months have elapsed since she borrowed it. She has not paid it. Without my consent, that information will have gone to my brother, sister, boss and friends hence causing unnecessary embarrassment to the clients. Because of this data issue when COVID-19 struck, the Central Bank of Kenya disallowed digital lenders from listing the creditors at the Credit Reference Bureau (CRB). This listing was being abused. People were taking loans. You may have borrowed Kshs2,000 or Kshs3,000 shillings and you have not paid with interest that is at 100 per The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}