Kenya’s credit market is on the verge of its most significant regulatory overhaul in years, with the Central Bank of Kenya (CBK) preparing new rules to bring all non-deposit-taking lenders under its supervision. The framework will require any credit-only provider with at least $155,000 in capital, borrowings, or loan book to secure a CBK licence. Smaller lenders will still need to register, creating a two-tier system designed to close regulatory gaps that have left parts of the industry operating with minimal oversight.
Wide Impact Across Lending Segments
The changes will affect a broad range of lenders currently outside CBK control, including buy-now-pay-later companies, hire purchase businesses, credit guarantors, peer-to-peer platforms, and pay-as-you-go operators. Once gazetted, lenders will have six months to comply, a short runway for businesses unaccustomed to direct regulatory scrutiny. The CBK aims to create baseline standards for loan pricing, customer data management, and complaint resolution—areas that have largely depended on self-policing until now.
Detailed Requirements for Full Licences
Lenders meeting the $155,000 threshold must submit extensive documentation, including ownership records, sources of capital, anti-money laundering measures, technology systems, and credit risk policies. They will also need to prove that their funds are legitimate and not linked to criminal activity. Firms below the threshold will go through a lighter registration process but must upgrade to a full licence if they expand their capital base, borrowings, or loan portfolio.
Compliance Monitoring and Fast-Track Upgrades
The CBK will actively monitor registered firms for under-reporting of capital or rapid growth that would require a licence upgrade. The regulator will have the authority to compel swift compliance in cases where incomplete disclosures or expansion trigger the full licence criteria. This proactive approach is aimed at preventing circumvention of the rules and ensuring consistent oversight across the sector.
Existing Players and Transition Plans
Currently, 126 digital credit providers licensed by the CBK will not need to reapply under the new framework. Another 574 pending applications will be assessed according to the new rules once they take effect. The regulator’s goal is to ensure all players operate under harmonised consumer protection standards and transparent governance practices.
A Push for Fairness and Transparency
Under the draft regulations, all lenders—whether licensed or registered—must sign and comply with a code of conduct mandating fairness, transparency, and responsible lending. This aligns with CBK Governor Kamau Thugge’s broader mission to bring consistency to a sector where borrowers often face opaque pricing and inconsistent treatment. The reforms are enabled by amendments to the Business Laws (Amendment) Act 2024, which expanded the CBK’s mandate over credit-only providers.
By extending oversight to all non-deposit-taking lenders, the CBK is laying the groundwork for a more transparent, fair, and stable credit market. The reforms promise stronger consumer protections, clearer operational standards, and more consistent pricing—though the six-month compliance window will challenge some lenders. If fully implemented, the new regime could level the playing field and boost trust in Kenya’s growing credit economy.