The Central Bank of Kenya on the 18th March,2022 published regulation – DIGITAL CREDIT PROVIDERS REGULATIONS,2022 (the DCP Regulations) which operationalizes the provisions of the Central Bank of Kenya (Amendment) Act 2021 that became effective on 23rd December 2021.The Act required that the Regulations must be made within three months of the Act coming into force and they therefore became effective immediately.

This is on the backdrop that the digital lenders/providers have been operating unregulated within the Kenyan market, the Regulations therefore tends to curb this loop hole and unlike previously when they only had to register business name via e-citizen to set up operations in the country.

Who is a Digital Credit Provider (DCP)

Digital Credit Providers (DCPs) are entities involved in business of providing credit facilities through digital channels such as the internet, mobile devices, computer devices, applications and any other system as may be prescribed by the Central Bank of Kenya.

Licensing of the Digital Credit Providers

Regulation provides for the prescribed form and documentation that DCP’s require for application of licenses from the Central Bank of Kenya. Under the Regulations, a person can only engage in digital credit business if they are either licensed by the CBK or permitted to do so under any other written law. The licensing requirements for DCP’s can be accessed here.

Exempted Institutions and entities

  1.  An institution licensed under the Banking Act;
  2. An institution licensed under the Microfinance Act,2006;
  3. A Sacco society licensed under the Sacco Societies Act,2008;
  4. The Kenya Post Office Savings Bank supervised under the Kenya Post Office Savings Bank Act;
  5. Credit arrangements involving the provision of Credit by a person that is merely incidental to the sale of goods or provision of services by the person whose primary business is the provision of the goods or services;
  6. An entity whose digital credit business is regulated under any other written law; and
  7. Any other entity approved by the Bank

Compliance with the Regulations

The compliance requirement under the regulations include;

  • Compliance with financial and other reporting requirements and;
  • Compliance with data protection regulations,
  • Adoption of measures to counter financial terrorism;
  • Adoption of elaborate anti-money laundering measures;
  • Ensuring there are adequate consumer protection provision;
  • Disclosure of information to credit reference bureaus for purposes of discharging functions of the digital lenders and licensed credit reference bureaus;
  • Compliance with the traditional fit and proper tests applicable to significant shareholders, directors, CEOs and Senior Officers

Penalties and Administrative Sanctions.

The Regulations outlines various offences, penalties and other measures necessary for the regulation of digital lending ensuring compliance. It is an offence to carry on digital credit business without a license from the Central Bank of Kenya, and is punishable by imprisonment for a term not exceeding three years (3years) or a fine not exceeding Kenya shillings Five Million(ksh.5,000,000) or both.

Non-compliance may lead to a first instance penalty of up to Kenya shillings Five Hundred thousand (ksh.500,0000 and additional penalties up to Kenya Shillings ten thousand(ksh.10,000) each day during which the violation or non-compliance continues.

Central Bank of Kenya may also suspend or disqualify the non-compliant shareholder, director or officer in addition to prescribing additional remedial measures as it sees fit or suspending or revoking the license held by the DCP.


In the recent years, digital lending firms have significantly flooded the local market due to high demand for quick credit that is instant, automated and can be accessed remotely and easily. The Regulations have addressed concerns such as fraudulent loans, consumer protection and data privacy. Pursuant to the publication of these Regulations, all previously unregulated DCP’s are required to apply to Central Bank of Kenya for a license within six months of the publication of the Regulations that is by the 17th September 2022 or cease operations.

We therefore recommend that all the firms, companies and or entities engaging in digital credit business to initiate steps to comply with the Regulations. Contact us for assistance and advice on ensuring compliance with the Regulations through