Experts Claim CBK Tight Regulations are Strangling Innovation

Experts in digital technology are now accusing the Central Bank of Kenya of suffocating the innovation pipeline through excessive regulation.

According to participants, the move is excluding many investors and individuals looking to do business in the country.

Dr Jim Mcfie, Academic and Research Director at Strathmore University, said during an Information Systems Audit and Control (ISACA) Kenya Chapter annual conference in Diani, Mombasa, that over-regulation will kill the industry that is operating at this critical time of full technological transformation.

“You should not just keep people out because of anti-money laundering and not financing crime. This can happen very few times in our history in Kenya. All the legislation is there, so let us be open to innovation,” he said.

To combat the threat facing the financial industry, the CBK has recently increased its surveillance of the sector. The CBK has recently placed digital lenders under its regulatory microscope.

Dr. Mcfie, the event’s keynote speaker, stated that previous studies have shown that overregulation in Kenya is slowing the growth of the country’s digital industry.

Instead of many limitations and laws that do not solve most problems, he believes Kenya should focus on developing honesty, which will lead to further growth of sectors such as digital banking and lending, resulting in the birth of a vibrant economy in the digital age.

“You do not solve problems by passing laws and increasing legislation. Development can only take place if we work in an environment where honesty starts from top officials,” he explained.

ISACA Mercy Omollo, Kenya’s vice-president, stated that Kenya is establishing many regulations for digital businesses and operations, which have both positives and negatives.