Central Bank of Kenya (Digital Credit Providers) Regulations, 2022

The Central Bank of Kenya (Digital Credit Providers) Regulations, 2022, gazetted on 18 March 2022 as Legal Notice No. 46, brought Kenya's previously unregulated digital lending sector under the supervision of the Central Bank of Kenya (CBK). The Regulations respond to the rapid growth of app-based digital lenders and to widespread concern about predatory pricing, opaque terms, abusive debt-collection practices and the misuse of borrowers' personal data. They are squarely a fintech instrument: they regulate digital credit providers (DCPs) precisely because of the technology-enabled, app-based nature of their lending, rather than as ordinary consumer-credit law. The Regulations require any person carrying on digital credit business that is not already licensed under other financial-sector laws to obtain a licence from the CBK; existing DCPs were required to apply by 17 September 2022 or cease operations, and carrying on digital credit business without a licence is an offence punishable by imprisonment of up to three years or a fine of up to KES 5 million, or both. The CBK assesses applications against fit-and-proper, governance, source-of-funds and consumer-protection criteria and must determine a complete application within sixty days. Licensed DCPs are subject to ongoing obligations covering pricing transparency and disclosure of the total cost of credit, fair debt-collection practices (prohibiting harassment and unauthorised contact of third parties), data-protection compliance and limits on the use of customers' personal and contact data, AML/CFT measures, reporting to the CBK, and consumer-complaint handling. The CBK publishes the names of licensed DCPs annually and may impose monetary penalties for non-compliance, including continuing daily penalties, and may suspend or revoke licences. By licensing and supervising digital lenders, the Regulations significantly reshaped Kenya's large digital-credit market.

1. 1Brings app-based digital credit providers under mandatory CBK licensing
2. 2Existing DCPs required to apply by 17 September 2022 or cease; unlicensed operation an offence (up to 3 years or KES 5m fine)
3. 3CBK assesses fit-and-proper, governance, source-of-funds and consumer-protection criteria; 60-day decision on complete applications
4. 4Pricing transparency and total-cost-of-credit disclosure; fair debt-collection rules barring harassment and third-party contact
5. 5Data-protection compliance and limits on use of borrowers' personal/contact data; AML/CFT obligations
6. 6CBK supervision with monetary penalties (including daily continuing penalties), suspension and revocation