In recent years Kenya has seen a surge in mobile lending platforms offering loans via mobile phones. While these has increased financial inclusion, it has also raised concerns about debt recovery practices. Many Kenyans have reported harassment from mobile lenders and wondering what legal protections and avenues of redress are available.
Mobile Loan Recovery Harassment
Mobile loan recovery harassment is when lenders use unethical means to recover loans. These include:
Unsolicited Communications: Repeated calls or messages to borrowers at odd hours demanding loan repayment.
Third Party Disclosure: Contacting friends, family or employer of the borrower without consent, breaching confidentiality.
Threats and Intimidation: Using threatening language or implying legal action without basis to force repayment.
Legal Framework for Borrowers
Kenya has several legal instruments to protect consumers from such practices:
Data Protection Act, 2019: This Act requires personal data to be processed lawfully and transparently. Sharing of a borrowers information without consent is illegal.
Consumer Protection Act, 2012: It protects consumers from unfair practices including harassment from lenders.
Central Bank of Kenya (CBK) Regulations: CBK regulates financial institutions including digital lenders to ensure fair lending and recovery practices.
Reporting Harassment and Seeking Redress
Victims of mobile loan recovery harassment in Kenya can use the following avenues to report and get redress:
Office of the Data Protection Commissioner (ODPC): If a lender has mishandled your personal data such as sharing it without consent, you can file a complaint with the ODPC. ODPC investigates such complaints and can penalize violators.
Central Bank of Kenya (CBK): You can report unethical practices by digital lenders to CBK, they have the power to sanction non-compliant institutions.
Communications Authority of Kenya (CAK): For issues related to unsolicited communications or misuse of communication channels by lenders, complain to CAK.
Law Enforcement Agencies: For threats, intimidation or other criminal behavior, report to the police.
Court Redress: Victims can seek legal advice to sue lenders for damages caused by harassment. Kenyan courts have in some cases awarded victims of such practices.
Recent Development and Enforcement
The Kenyan government has increased efforts to regulate digital lending. CBK now requires all digital lenders to register and adhere to a code of conduct that protects consumers. Non-compliant lenders will be penalized including revocation of licenses.
Also ODPC has been active in enforcing data protection laws. In recent cases ODPC has fined companies for unauthorized sharing of personal data, they mean business when it comes to data privacy.
Conclusion
While mobile lending has brought financial inclusion to many Kenyans, lenders must operate within the law and respect borrower’s rights. Borrowers must know their rights and the channels to report and get redress for any harassment experienced.