Whitepath, a Kenyan digital lender, has found itself in hot water after being fined for listing a guarantor without consent. The incident occurred in November 2024 when Dennis Caleb Owuor received a debt collection call from Whitepath, claiming he was a guarantor for a loan he never agreed to back. Despite his denial and lack of consent, the lender continued its demands.
The Office of the Data Protection Commissioner (ODPC), led by Commissioner Immaculate Kassait, investigated the matter. Kassait noted that Whitepath remained unresponsive during the investigation, leading to the imposition of a significant fine.
This isn’t Whitepath’s first run-in with regulators. In 2023, the lender was hit with a KES 5 million fine after receiving nearly 150 complaints accusing the company of accessing clients’ phone contacts without permission and sending unsolicited messages.
A Stricter Lending Environment
Kenya’s digital lending market has experienced rapid growth, praised for enhancing financial inclusion but criticised for unethical practices. Issues such as high-interest rates, misuse of personal data, and aggressive debt recovery tactics have plagued the sector, prompting regulatory intervention.
To address these concerns, the Central Bank of Kenya (CBK) introduced the Digital Credit Providers (DCP) Regulations in 2022. These regulations require all digital lenders to obtain licences to operate, aiming to protect consumers from exploitation.
The crackdown has been intense. Before the regulations, hundreds of digital lenders operated in Kenya, many without any oversight. The CBK’s stringent vetting process has since reduced the number of licensed digital credit providers to 51.
This regulatory shift aims to eliminate predatory lending practices and ensure only compliant and ethical lenders remain in the market. The CBK’s oversight also includes monitoring interest rates and debt collection practices to foster a fairer financial environment.
Unethical Tactics Persist
Despite regulatory efforts, some lenders continue to engage in questionable practices. Tactics such as unauthorised data access and publicly shaming defaulters not only violate individual privacy but also damage trust in digital financial services.
Whitepath’s repeated violations highlight the need for stronger regulatory frameworks within Kenya’s digital lending sector. The combined efforts of the ODPC and CBK aim to establish a more transparent and ethical lending environment, prioritising consumer rights and
