Popular articles

Regulation of the Digital Lending Platforms by the Central Bank of Kenya – CBK


The Central Bank of Kenya (Amendment) Bill, 2020 (the “Bill”) was published on 19 June 2020. Approved by the Parliament on On 25th February, 2021 and is now before the National Assembly Committee and National Planning presented in April 2021.

Through this Bill, the Central Bank of Kenya (“CBK/the Bank”) is seeking the mandate to supervise and regulate digital financial products and services by licensing digital credit service providers who are not regulated under any other law. This is because, as there is currently there is no legal framework governing digital borrowing platforms in Kenya, CBK has the obligation to ensuring that there is a fair and non-discriminatory marketplace for access to credit by the public.


The Bill seeks to amend the Central Bank of Kenya Act Cap 491 of the Laws of Kenya (the “Act”) to include the following new definitions:

  1. “digital channel” means the internet, mobile devices, computer devices, applications and any other digital systems as may be prescribed by the Bank;
  2. “digital credit” means a credit facility or arrangement where money is lent or borrowed through a digital channel;
  3. “digital credit business” means the business of providing credit facilities or loan services through a digital channel;
  4. “digital credit provider” means a person licensed by the Bank to carry on digital credit business;
  5. “specified digital credit provider” means a licensed digital credit provider within the meaning of section 33R.


  1. Digital credit lenders now have a defined law that governs them and that enables the CBK to provide oversight in the supervision and enforcement of the laws, thereby providing stability in the industry.
  2. The law now allows for the monitoring on the interest rates charged by digital credit lenders, thereby enhancing consumer protection is enhanced
  3. The inclusion of definitions relating to digital credit provides room for the addition of other forms of innovations that may be coming up in the future to be covered under the Act without need for additional amendments to it.


The formulation of the draft Bill is a clearly a welcome solution to the regulation of the fast growing mobile money and digital credit industry in Kenya which have been providing non-deposit taking financial services without being regulated under the Banking Act Cap 488 and the Micro-Finance Act 2006.

In the meantime, we are keenly following up on the enactment process of the Bill and shall keep you updated on the process of its enactment.

Please contact us in case of any queries or clarifications via our email at info@netsheria.com or call us on +254 716209673

Looking for more?

We provide all the legal insights for your business.