Kenya's Digital Lending Boom: 153 Licensed Lenders Fuel Financial Inclusion

The Central Bank of Kenya (CBK) has approved 27 new Digital Credit Providers (DCPs), bringing the total number of licensed digital lenders in the country to 153. The announcement, made on September 5, 2025, marks the latest phase in the regulator’s strategy to bring Kenya’s rapidly expanding digital lending sector under formal oversight. This follows the licensing of 41 additional DCPs in June 2025, bringing the total number of approvals since the regulatory framework was introduced in March 2022 to over 150. To date, the CBK has received more than 700 applications from lenders seeking to operate under the formal licensing regime [2].

The digital lending sector has emerged as a key driver of financial inclusion in Kenya. As of June 2025, licensed DCPs had disbursed 5.5 million loans totaling Ksh 76.8 billion ($593.7 million), reflecting the sector’s growing role in supporting personal and small business financing. These institutions offer a range of credit products, including short-term personal loans, education financing, and working capital for small enterprises. The loans are typically delivered through mobile platforms, USSD codes, and agent networks, leveraging Kenya’s high mobile penetration to reach borrowers who may otherwise lack access to traditional banking services [1].

The CBK’s licensing process has been designed to ensure that lenders meet stringent criteria, including robust governance structures, sound business models, and compliance with consumer protection standards. The regulator emphasized that only those institutions demonstrating financial stability and ethical practices are eligible for a license. This includes evaluating the fitness and suitability of shareholders, directors, and senior management. The licensing initiative is part of the broader agenda to address past industry issues, such as exorbitant interest rates, misuse of customer data, and aggressive debt collection practices [2].

In addition to expanding the number of licensed lenders, the CBK is also working to tighten regulations further. A draft of the Non-Deposit Taking Credit Providers Regulations, 2025, has been published for public consultation. The proposed rules would require any credit-only provider with at least Ksh 20 million ($155,000) in capital, borrowings, or loan book to obtain a CBK license. This two-tiered system aims to close regulatory gaps that previously left parts of the industry unmonitored. Firms will have six months to comply once the final regulations are gazetted [1].

The expansion of the regulated digital lending sector has had tangible benefits for consumers and the broader economy. According to a report by Technext, Kenyans take an estimated $3.85 million (Ksh 500 million) in loans per day from digital credit platforms, with over eight million borrowers—16 percent of the population—engaging in monthly borrowing. Digital lending has provided a critical source of liquidity for families in times of need, small businesses, and even the boda boda transport sector. Moreover, licensed DCPs have contributed to digital inclusion by disbursing an average of 100,000 smartphones per month, further expanding internet access and participation in the digital economy [2].

Despite these gains, the CBK remains focused on ensuring responsible lending practices. The regulator has emphasized that all licensed DCPs must comply with consumer protection standards and maintain ethical conduct. Public awareness campaigns and reporting mechanisms have also been introduced to help consumers identify and report unlicensed lenders. These measures are part of the CBK’s broader strategy to promote transparency, stability, and trust in the digital lending ecosystem [3].

Source:

[1] Kenya's digital lenders lend $594 million in three years (https://techcabal.com/2025/09/05/kenyas-digital-lenders-lend-594-million-in-three-years/)

[2] Central Bank of Kenya approves 27 new digital lenders (https://technext24.com/2025/09/05/kenya-approves-27-new-digital-lenders/)

[3] CBK Licenses 27 New Digital Lenders (https://www.kenyans.co.ke/news/115964-cbk-licenses-27-new-digital-lenders)