CENTRAL BANK OF KENYA
World Consumer Rights Day
Keynote Address by Dr. Patrick Njoroge
Governor, Central Bank of Kenya
Tuesday, March 15, 2022
Pride Inn Paradise Hotel, Mombasa
As Prepared for Delivery
Good morning! I am delighted to participate in the World Consumer Rights Day being
observed globally with a theme of Fair Digital Finance. I appreciate the invitation from
the Communications Authority of Kenya (CA) to preside over this important function. I
am appraised that this day is being observed in 100 countries to highlight the
opportunities and consumer protection issues arising from digital finance. Indeed the
consumer is at the heart of any service. For financial services, customer centricity has
become the core enabler of the success or otherwise of financial services providers.
In setting the stage for today’s theme of Fair Digital Finance, I will highlight three broad
themes in the global and national spheres.
First, globally, digital channels particularly mobile phones have became a key enabler of
financial services. Digitalization has upended the traditional brick and mortar model of
providing financial services to one where these services are available through digital
devices anywhere anytime. Beyond financial services, digital channels have enabled the
provision of other services including e-commerce, health, education and entertainment.
The explosion of digital services was especially pertinent during the COVID-19
pandemic. Given the various containment measures, particularly movement restrictions
and social distancing requirements, digital services became a lifeline for the global
populace. This has also increased the prominence of the Bigtechs that are providing a
variety of non-financial and financial services.

Globally, Microsoft, Google, Meta (formely Facebook), Amazon and Apple are the face
of Bigtechs. But beyond the United States, Alibaba and Tencent in China, Mercado Libre
(online market) in Latin America, ride hailing services in South East Asia (Grub and
Gojek) and mobile phone financial services firms in Africa are increasingly exhibiting
the characteristics of Bigtechs though on a more regional scale.
Further, the pace of technological changes and innovations has accelerated. This has led
to the emergence of new payment methods including digital currencies such as electronic
money, privately issued currencies such as cryptocurrency and stable coins and publicly
issued, Central Bank Digital Currencies (CBDC). A CBDC is a digital currency issued
by the central bank and intended to serve as legal tender.
Second, turning to Kenya, digital financial services have underpinned the transformation
of access to financial services in the last 15 years. The sixth edition of the FinAcess
Household Survey released by the Central Bank of Kenya (CBK), the Kenya National
Bureau of Statistics (KNBS) and the Financial Sector Deepening Trust (FSD) Kenya, in
December 2021, indicates that 83.7 percent of Kenya’s adult population accesses
financial services. This is a three fold increase from 26.7 percent, in the baseline Survey
that was conducted in 2006. This transformation has been anchored on digital financial
services whose trigger was the introduction of mobile phone money transfer services in
2007. The money transfer proposition rapidly expanded over time to today’s elaborate
financial services ecosystem spanning among others-credit, savings, insurance, capital
markets products and pensions.
Third, whereas digital financial services have provided opportunities to expand the
financial inclusion frontier, they have also posed challenges. In particular and germane to
today’s event are consumer protection issues. For Kenya, the 2021 FinAcess Survey
assessed consumer protection practices focusing on customer experiences on services
received and access to information from financial services providers. Various challenges
were reported in the use of financial services and products. These were principally:
• Unexpected/unclear charges i.e., lack of transparency in pricing
• Loss of money
• Fraud
• Inability to access services due to system downtime or unavailability of internet.

Against this backdrop, there are three key concerns the CBK is currently addressing
towards a Fair Digital Finance marketplace in Kenya.
First, putting in order the unregulated digital credit lenders. Kenya has seen a
proliferation of credit provided through digital channels particularly mobile phones. This
has been both through regulated entities such as commercial and microfinance banks but
also by unregulated entities through Digital Loan Applications (Apps). The unregulated
Apps saw their usage rise from 0.6 percent of the adult population in 2016 (200,000
users) to 8.3 percent in 2019 (2 million users) before slowing to 2.1 percent in 2021
(approximately 600,000 users).
Consumers have raised concerns relating to unregulated digital lenders including
predatory practices, in particular, their high cost, unethical debt collection practices, and
the abuse of personal information. The bait was the quick credit, then the borrower is
reeled in and rendered usunder with the outrageous debt collection practices. To address
these concerns, the National Assembly passed the Central Bank of Kenya (Amendment)
Act 2021, became effective on December 23, 2021, following Presidential assent on
December 7, 2021. The Amendment provides for the licensing and oversight of
previously unregulated Digital Credit Providers (DCPs) by CBK.
On December 23, 2021, CBK issued the draft Central Bank of Kenya (Digital Credit
Providers) Regulations for public comments. Following the closure of the public
consultation period, we have completed the review of the public comments and
incorporated them as appropriate. The Regulations will be gazetted later this month,
completing the journey for licensing and oversight of the DCPs by CBK. All previously
unregulated DCPs will be required to apply to CBK for a license within six months of the
publication of the Regulations i.e., by September 2022 or cease operations. We are
now in business.
Second, the cost of mobile money transactions has been a cause of concern to
consumers. Further, some of the charges are not easily understood by an average
customer. In 2018, in a bid to address these concerns, CBK worked with the mobile
money Payment Service Providers (PSPs) to facilitate interoperability across their
different networks and reduce the related costs. More broadly, at the onset of the
COVID-19 pandemic, CBK, PSPs and commercial banks agreed on a set of emergency

measures to facilitate the use of digital channels in light of the pandemic containment
measures put in place. These measures included waiver of transaction fees for low value
transactions below Ksh.1,000, increase of mobile money transaction and wallet limits
and waivers of charges for transfers between bank and mobile wallets.
Most of the emergency measures expired in December 2020. A significant increase of
mobile money usage was noted over the period the measures were in place,
demonstrating that they were timely and effective. For instance, the monthly volume of
person-to-person transactions increased by 87 percent between February and October
2020. Over this period the volume of transactions below Ksh.1,000 increased by 114
percent, while 2.8 million additional customers are using mobile money. Businessrelated transactions also recorded significant growth over the same period.
To sustainably address the costs of mobile money transactions, CBK in the National
Payments Strategy, 2022-2025 ( the Strategy) has rolled out pricing principles (the
principles) to be adopted by PSPs. The Strategy seeks to realise a vision of A secure,
fast, efficient and collaborative payments system that supports financial inclusion and
innovations that benefit Kenyans. The vision will be anchored on core principles of trust,
security, usefulness, choice and innovation.
In the Strategy, CBK will continue to roll out the Principles in order to enhance customer
focus in pricing of digital services. The primary aim will be to ensure that tariffs and
pricing policies and practices are underpinned by principles such as transparency,
disclosure, cost effectiveness and customer-centricity. In addition, focus will be on
appropriate pricing that is consistent with the current state of the market including
efficiency considerations and safeguarding against excessive pricing or customer abuse
due to undisclosed fees and charges.
Additionally, CBK will guide and facilitate the efforts to achieve full-scale
interoperability across the payments ecosystem. Building on the gains from Person to
Person (P2P) interoperability rolled out in 2018, CBK will facilitate players in the
industry to achieve seamless and customer-centric interoperability. The overall aim is to
provide customers with a seamless, secure and affordable functionality to send and
receive money from any financial institution across the payments ecosystem. I expect
that consumers will see further steps towards greater interoperability in the near term.

Third, is the increased risk of cybersecurity and more broadly data governance as the
use of digital financial services deepens in Kenya. This is as a result of the increased
shift of financial services operations to digital platforms. At the consumer level,
increased incidents of identity theft, social engineering/phishing have arisen. This has
seen some consumers lose their funds to fraudsters.
To addess these emerging issues, CBK issued Guidance Notes on Cybersecurity to banks
and PSPs in 2017 and 2019 respectively. The Guidance Notes require the banks and
PSPs to put in place comprehensive cybersecurity risk management frameworks. Among
the controls that have been implemented include:
• Comprehensive reviews of service level agreements and contracts with third parties to
ensure that they have cybersecurity frameworks that meet the resilience requirements
of the banks and PSPs.
• Ramping up of ICT staff skillset/competencies through continuous overall staff
education and consumer awareness campaigns on cybersecurity.
• Banks and PSPs should regularly share their internal and external ICT audit reports
for CBK’s assessment on their response to issues raised.
• Banks and PSPs should report to CBK of any cyber incidents that occur and how they
responded to resolve the events.
More broadly, CBK continues to work with other agencies, nationally, regionally and
internationally in a circle of trust to share pertinent information and co-ordinate
appropriate responses to the cybersecurity threat.
On data governance, particularly data privacy, Kenya has made significant steps with the
enactment of the Data Protection Act, 2019. This was operationalized by the
establishment of the Office of the Data Protection Commissioner (ODPC) that is well
represented here today. CBK is committed to working with the ODPC and other
pertinent agencies in ensuring that the insitutions under its ambit including banks and
PSPs have robust data governance frameworks to protect consumers data.
As I draw to a close, the participation of consumers in key decisions impacting their
finances is paramount. It is in this spirit that CBK issued a Discussion Paper on Central
Bank Digital Currency in February 2022. The Paper seeks to assess the potential

applicability of a CBDC in Kenya highlighting the risks and opportunities. Given the
wide ranging implications of CBDC to the wider economy, any eventual decision to
introduce a CBDC would involve the government, regulators, private sector and most
importantly the public. Any currency rises and falls on public trust and CBK welcomes
comments from the public on the Paper by May 20, 2022.
I am sure that the most pertinent question, that we must seek to answer today is whether
we have a fair digital finance marketplace in Kenya. The answer, though, tells us where
we are in the journey towards realizing the vision that centers around the benefits to
consumers. I look forward to the deliberations on what we at CBK consider to be the
important journey we are on, but whose pace must be increased so that digital finance
ultimately works with and for all Kenyans.
Thank You!