Proposed Financial Markets Conduct Authority aims to regulate and supervise the conduct of providers in financial products and services to retail financial customers.
Kenyans seeking loan facilities from banks and other credit providers could soon enjoy some form of protection from unscrupulous financial institutions, if a proposed legislation is passed into law.
The proposed Financial Markets Conduct Bill, 2023 which is sponsored by the National Assembly’s Departmental Committee on Finance and National Planning Chairperson Kimani Kuria, also seeks to establish an authority that will regulate and supervise the conduct of credit facility providers.
The Bill proposes the creation of a fund known as the Conduct Compensation Fund, from which disenfranchised clientele can seek compensation for loss or damages attributed to a credit facility provider.
The proposed legislation will protect guarantors, by introducing a requirement that they are made aware of all the clauses in a loan contract before signing
Kuria says that the main objective of the Bill is to promote a fair, non-discriminatory financial market that is conducive for better credit access through the establishment of uniform practices and standards for providers of financial services.
Among the proposals in the Bill include the establishment of a Financial Markets Conduct Authority, the Financial Sector Ombudsman and the Financial Sector Tribunal for effective supervision of providers dealing with retail financial customers.
“The legislative proposal will provide for restriction of lenders from providing credit reports that contain information about the customer, as well as recommendations about the creditworthiness of the customer, based on prohibited information,” reads part of the Bill.
The proposed Financial Markets Conduct Authority is poised to among others, regulate and supervise the conduct of providers in financial products and services to retail financial customers and also to regulate and supervise the conduct of credit providers and credit service providers.
It also seeks to promote financial inclusion by ensuring that all retail financial customers have timely and fair access to appropriate, fair and affordable financial products and financial services.
Notably, the proposed legislation further seeks to protect guarantors, by introducing a requirement that they are made aware of all the clauses in a loan contract before signing.
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