The Central Bank of Kenya (CBK) has proposed new regulations to strengthen oversight of digital loan apps and other private lenders who do not take customer deposits.
CBK, in a notice issued on Thursday, invited the public to provide their opinions and feedback on the draft CBK (Non-Deposit Taking Credit Providers) Regulations, 2025, which aim to better protect borrowers from high interest rates, being troubled by debt collectors, and misuse of personal data.
The regulator explained that the proposed changes are meant to operationalise amendments made to the CBK Act through the Business Laws (Amendment) Act, 2024. These changes also expand the scope of regulation from just digital lenders to all non-deposit-taking credit providers (NDTCPs).
This follows complaints that the original 2022 rules—which saw the licensing of 126 digital credit providers—did not go far enough in addressing industry loopholes.
"While progress was made in regulating Digital Credit Providers (DCPs), challenges persist. There is still confusion in the market and continued unethical practices," CBK stated.
Among the major updates is the replacement of the term “Digital Credit Providers” with “Non-Deposit Taking Credit Providers” to reflect the broader group of institutions being regulated. This includes lenders who operate through mobile apps, websites, or physical premises, as long as they do not accept deposits from customers.
The bank noted that the move was necessary to ensure borrowers are not exploited by unregulated lenders, especially in the fast-growing mobile lending sector.
As part of the next step, CBK is inviting the public to give their views on the proposed regulations, with feedback to be sent via its email addresses and official communication channels by Friday, September 5, 2025. The draft regulations are available on CBK’s official website for review.
The lender of last resort said that once adopted, the regulations will provide a clearer legal framework and improve transparency in Kenya’s credit market.
This will also help weed out rogue lenders who have previously operated without oversight, leading to widespread complaints by borrowers.
Meanwhile, in related developments, on July 30, CBK reverted to using the interbank rate as the main reference point for pricing bank loans, abandoning its earlier plan to anchor lending rates on the Central Bank Rate (CBR).
In a notice to commercial banks, CBK stated that going forward, loan interest rates will be determined using a new formula, using the Interbank Rate + Premium (K) issued. The move marks a return to a more market-driven pricing model that reflects real-time liquidity conditions among banks.
