The Central Bank of Kenya has approved licenses for new Digital Credit Providers (DCPs) in three batches in 2025, with approvals granted in June, September and December. The most recent approval, which was issued on December 30, 2025, raised the total number of licensed digital lenders in the country to 195, with 110 DCPs approved in 2025 alone.
The regulation of Digital Credit Providers (DCPs) in Kenya began in 2022 with the enactment of the Central Bank of Kenya (Digital Credit Providers Regulations), 2022, which were published in March 2022. This framework was established under the powers of the Central Bank of Kenya Act to bring the previously unregulated digital lenders under formal oversight.
The CBK also issued a deadline of September 17, 2022, for unregulated DCPs to apply to the Central Bank of Kenya (CBK) for a licence, failure to which the DCPs would have to cease operations in the country. Since the inception of these regulations in 2022, the CBK has received in excess of 800 applications from various entities seeking to legitimize their operations and through a phased licensing process, the number of authorized providers has grown steadily, reaching a total of 195 licensed DCPs.
There was a public outcry regarding the predatory practices of unregulated lenders which led to the formation of a regulated environment. Some of the concerns cited by the CBK included the excessive costs of digital loans and the frequent use of unethical debt collection methods. Additionally, there were issues on the abuse of personal information and a general lack of transparency regarding the terms of the loans. By introducing these regulations, the CBK aimed to safeguard the interests of customers, ensure financial integrity, and force providers to adhere to ethical business models.
These regulations provide essential legal protections to Kenyans and much needed transparency in the digital credit market in the country. Licensed DCPs are strictly prohibited from using harassment, threats, or shaming tactics such as accessing a borrower’s phone contacts or posting sensitive information online during debt collection. The law also requires that lenders provide clear disclosures of all loan charges and interest rates before a loan is granted.
Kenyans can verify the legitimacy of a lender by checking the official directory published in the Kenya Gazette or on the CBK website, ensuring they only engage with providers held accountable by national standards. Additionally, the law protects privacy by requiring the customer to consent for information sharing and providing an “opt-out” feature for marketing messages. As of November 2025, this regulated environment has supported the issuance of 6.6 million loans valued at KES. 109.8 billion (USD 0.9 billion), covering education, business, development, personal (short-term), and asset-financing needs.
How to Obtain a license as a DCP
To obtain a license, a digital credit provider must follow a rigorous process that starts with business name approval from both the Registrar of Companies and the CBK. The applicant should then submit a formal application (Form CBK DCP 1) along with other relevant documentation, including a business plan, data protection policies, Anti-Money Laundering (AML/CFT) policies and a non-refundable application fee of KES 5,000.
A critical requirement is passing the data submission test, where the provider under review must prove it can meet regulatory reporting standards through Application Programming Interfaces (APIs). The CBK will also do vetting of shareholders, directors, and senior officers to ensure they possess the necessary professional experience and moral integrity. Once a company meets all compliance standards, the applicant pays an annual licensing fee of KES 20,000 to receive official authorization.
Also read: Rate Cuts Spur Kenya’s Credit Growth
