Nairobi, April 21 -- Banks and digital lenders will have to reassess borrowers' financial capacity before increasing their loan limits under draft rules aimed at curbing predatory lending.

Financial regulators, including the Central Bank of Kenya (CBK) and the Sacco regulator, say lenders must evaluate borrowers' income, expenses and assets afresh before upgrading loan limits.

Currently, banks and digital lenders increase borrowers' limits based on repayment of previous loans, without assessing their ability to service new facilities.

Regulators say this practice has saddled both banked and unbanked borrowers with costly, mounting debt.

Tighter rules

"A Financial Service Provider (FSP) shall not provide a credit product, or an increa...