The Central Bank of Kenya (CBK) has granted licenses to 41 additional Digital Credit Providers (DCPs), bringing the total number of approved digital lenders in the country to 126. This significant move aligns with Section 59(2) of the CBK Act and follows a similar batch licensing of 27 DCPs in October 2024.
In a statement issued on Thursday, CBK said the licensing exercise is part of its ongoing efforts to strengthen oversight in the digital lending space. The regulator has received more than 700 applications since March 2022, when it began regulating digital lenders.
Strengthening Oversight in the Digital Lending Sector
The digital lending sector in Kenya has seen explosive growth in recent years, offering borrowers quick and convenient access to credit via mobile apps. However, this rapid expansion has raised numerous concerns about consumer protection, unethical debt collection practices, and abuse of personal data.
CBK stated that it has worked closely with applicants throughout the vetting process, reviewing their business models and operational structures to ensure they meet the required standards. The licensing process also involved consultations with other regulatory bodies, including the Office of the Data Protection Commissioner (ODPC).
“The focus of the engagements has been inter alia on business models, consumer protection, and fitness and propriety of proposed shareholders, directors, and management,” the CBK noted.
The inclusion of the ODPC ensures that the digital lenders comply with Kenya’s data protection laws, especially considering past complaints about misuse of borrowers’ personal data.
Licensing Process Still Ongoing
CBK emphasized that the licensing of DCPs is a continuous process. While 126 providers have now been fully licensed, many applications are still under review. Some applicants are at advanced stages, pending submission of required documentation.
“Other applicants are at different stages in the process, largely awaiting the submission of requisite documentation,” said CBK, urging them to “complete and submit the remaining documentation expeditiously.”
The central bank reaffirmed its commitment to a transparent and accountable vetting process that prioritizes the protection of Kenyan consumers.
Public Concern Prompted Regulation
The regulation of digital lenders in Kenya was officially mandated by an amendment to the CBK Act in 2021, which gave the regulator powers to supervise previously unregulated digital lenders. This legislative change came amid widespread public outcry over the operations of some digital lending platforms.
Many of these unregulated entities were accused of predatory lending practices—charging exorbitant interest rates, employing aggressive debt collection tactics, and violating user privacy through unauthorized data sharing and shaming tactics.
“The licensing and oversight of DCPs was precipitated by the concerns raised by the public about the predatory practices of the unregulated DCPs, and in particular, their high cost, unethical debt collection practices, and the abuse of personal information,” CBK stated.
The central bank says the current licensing framework is designed to ensure only ethical and financially sound digital lenders operate in the market, thereby restoring public confidence in the sector.
Public Participation and Transparency
CBK continues to encourage members of the public to participate in promoting a responsible digital lending environment. Kenyans are urged to report any unregulated or suspicious digital lenders via email at dpss@centralbank.go.ke.
In the spirit of transparency, the full list of newly licensed DCPs is available on the CBK’s official website. This allows consumers and other stakeholders to verify which lenders are operating legally.
A Timeline of Licensing Milestones
CBK’s licensing of digital lenders has followed a phased approach since the start of regulatory enforcement in 2022. Key milestones include:
- June 2024: 7 digital credit providers were licensed.
- October 2024: 27 more DCPs received licenses.
- June 2025: 41 additional DCPs were approved, raising the total to 126.
This phased rollout reflects the regulator’s cautious but deliberate approach to reforming Kenya’s digital lending landscape.
Impact on Consumers and the Market
For consumers, the rise in licensed digital lenders signals a safer borrowing environment. With CBK oversight, borrowers can now expect:
- Greater transparency in loan terms and pricing
- Improved data privacy protection
- Ethical debt collection methods
- A clear channel for lodging complaints
For the digital lending industry, CBK’s licensing signals the shift toward formalization and accountability. It also creates a more level playing field for players committed to ethical operations and financial inclusion.
Conclusion
The Central Bank of Kenya’s licensing of 41 new digital credit providers marks another milestone in its mission to clean up the digital lending sector. With 126 DCPs now approved, CBK has demonstrated its commitment to regulating a once-chaotic industry, ensuring that consumer protection, data privacy, and ethical business practices remain central to the future of digital finance in Kenya.
As the licensing process continues, more digital lenders are expected to meet the regulator’s criteria and receive formal approval. In the meantime, the public is advised to verify the legitimacy of digital lenders before engaging with them and to report any unlicensed operators to CBK.
For a full list of the newly licensed DCPs, visit the official CBK website.