The Central Bank of Kenya (CBK) has opened a public consultation on new regulations targeting Non-Deposit Taking Credit Providers, formerly known as digital lenders.
In a press release issued on August 7, 2025, CBK announced the release of the draft Central Bank of Kenya (Non-Deposit Taking Credit Providers) Regulations, 2025, aimed at strengthening regulatory oversight of lenders operating outside the traditional banking system.
This follows amendments to the CBK Act through the Business Laws (Amendment) Act, 2024, which replaced the term “digital” with “non-deposit taking” to provide clarity on the scope of institutions affected. The proposed regulations build on the existing 2022 framework, which was introduced in response to growing concerns over predatory lending practices, including exorbitant interest rates, the abuse of customer data and aggressive debt collection tactics by digital lenders.
“Whilst great progress was achieved in the regulation and supervision of DCPs, including the licensing of 126 DCPs to date, many challenges continued to affect the effectiveness of the legal and regulatory framework for DCPs,” CBK noted in the statement.
One of the most significant proposals in the draft is the limitation on the amount a lender can recover from a borrower once a loan becomes non-performing.
According to the document, “A non-deposit-taking credit provider shall be limited in what it may recover from a customer with respect to a non-performing loan to the maximum amount under subregulation (2).”
It continues, “The maximum amount referred to in sub-regulation (1) is the sum of the following, (a) the principal owing when the loan becomes non-performing; (b) interest per the contract between the customer and the non-deposit-taking credit provider, not exceeding the principal owing when the loan becomes non-performing and (c) reasonable expenses incurred in the recovery of any amounts.”
The draft regulations also address debt collection practices, prohibiting any form of harassment, threats or abuse by credit providers or their representatives. Lenders will not be allowed to shame borrowers, access a customer’s phone contacts without permission or share personal information publicly. Use of obscene language, intimidation or sending unauthorized messages will also be outlawed. These changes are aimed at curbing the misuse of power and ensuring ethical conduct in the credit market.
CBK is now calling on members of the public, industry stakeholders and interest groups to submit their views on the draft regulations. Written comments must be sent by Friday, September 5, 2025, via email to [email protected] or delivered in hard copy to CBK’s offices.
For more information, the full draft regulations are available on the Central Bank’s website.
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