Digital lenders will from September 18 be required to disclose the sources of their money to the Central Bank of Kenya (CBK) in measures aimed at curbing money laundering.

The requirement follows the gazettement of the Central Bank of Kenya (Digital Credit Providers) Regulations that compel the lenders to give details of their investors and also prove that the funds are not intended to fund criminal activities.

CBK Governor Patrick Njoroge has repeatedly warned that digital lenders offer platforms to clean dirty cash under the guise of providing cheap and easily accessible credit to Kenyans.

Money laundering involves transferring and disguising illegally obtained cash to make it look legitimate, and is mostly used by criminals and the corrupt to clean their wealth.

“A digital credit provider shall provide to the Bank the evidence and sources of funds invested or proposed to be invested in the digital credit business and demonstrate that the funds are not proceeds of crime,” say the regulations.

Unlike banks and microfinance institutions, digital lenders do not take deposits that in turn are loaned to borrowers.