Kenya’s Digital Lending Sector Thrives with $594 Million Disbursed Amidst Evolving Oversight
Kenya’s digital lending landscape has witnessed remarkable growth, with licensed providers disbursing a staggering 5.5 million loans, amounting to KES 76.8 billion ($594 million), over the past three years. This impressive scale underscores the sector’s vital role in the African tech ecosystem, particularly given that formal regulation only commenced in 2022, bringing a new era of structure and accountability to a previously unfettered market.
The Journey Towards Structured Digital Lending in Kenya
The Central Bank of Kenya (CBK) has been at the forefront of this regulatory transformation, actively working to professionalize the digital lending space. Following years of public outcry regarding issues such as exorbitant interest rates, aggressive debt recovery tactics, and concerning misuse of personal data by unregulated players, the CBK initiated a licensing process in March 2022. The first ten licenses were granted in September 2022, marking a significant milestone. Recently, the CBK cleared an additional 27 providers, bringing the total number of licensed digital lenders to 153. This expansion highlights the regulator’s commitment to creating a compliant environment, especially considering it has received over 700 applications to date, demonstrating the immense interest and demand within the sector.
Even as the number of approved firms steadily climbs, the CBK is proactively preparing to further strengthen its oversight. It recently released the draft Non-Deposit Taking Credit Providers Regulations, 2025, for public consultation. These proposed regulations are set to introduce more stringent requirements, notably mandating that any credit-only provider with at least KES 20 million ($155,000) in capital, borrowings, or loan book will be required to obtain a CBK license. This move signals a continued effort to ensure financial stability, consumer protection, and responsible lending practices, shaping a more secure future for Kenya’s dynamic digital finance sector.
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