Nairobi — The National Treasury plans to introduce new licensing rules for non-deposit-taking credit providers (NDTCPs) under the proposed Business Law (Amendment) Act, 2024.
Treasury Cabinet Secretary John Mbadi told the Senate that the new framework aims to strengthen oversight of digital lenders while easing requirements for smaller, lower-risk operators.
The proposal will reinforce supervision by the Central Bank of Kenya (CBK), particularly targeting large lenders that control most of the market.
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According to Mbadi, the top 10 NDTCPs out of 126 licensed firms hold 72.6 percent of the total loan portfolio, amounting to Sh45.5 billion out of Sh76.8 billion. He said these high-risk lenders should face closer monitoring and stricter supervision.
If approved, the framework will introduce a tiered licensing system. Smaller lenders with limited capital and loan books will face simpler entry and licensing requirements, while larger firms will be subject to tougher scrutiny.
The new regulations will also expand oversight beyond digital lending to cover other credit models such as buy-now-pay-later, peer-to-peer lending and pay-as-you-go arrangements.
In addition, the Treasury plans to raise penalties for lenders found harassing or mistreating customers. Fines could increase to as much Sh2 million, up from the current Shh500,000.
The proposed changes are aimed at improving consumer protection and bringing greater stability and accountability to Kenya's fast-growing digital credit market.
