Number of Licensed Digital Lenders Hit 153 as CBK Licenses 27 New DCPs: Kenya’s Digital Credit Revolution Accelerates

The Central Bank of Kenya (CBK) has licensed 27 new Digital Credit Providers (DCPs), in a bid to streamline lending activities in the financial technology space and bring total licensed lenders to 153, marking a significant expansion of Kenya’s regulated digital lending ecosystem.

In an announcement on Thursday, CBK said the move brings the total number of licensed lenders to 153 following the licensing of 41 DCPs in June 2025, demonstrating the regulator’s accelerated efforts to formalize the previously unregulated sector.

“The Central Bank of Kenya (CBK) announces the licensing of an additional 27 Digital Credit Providers (DCPs). This is pursuant to Section 59(2) of the Central Bank of Kenya Act (CBK Act). This brings the number of licensed DCPs to 153 following the licensing of 41 DCPs announced in June 2025,” a statement from CBK read.

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Massive Application Pipeline Reflects Sector Growth

Since March 2022, the regulator has received more than 700 applications with many still under review pending the submission of required documents, highlighting the enormous scale of Kenya’s digital lending market and the rush by operators to achieve regulatory compliance.

The extensive application volume reflects Kenya’s position as one of Africa’s leading fintech hubs, with Nairobi earning the nickname “Silicon Savannah” for its flourishing technology ecosystem and innovative financial services sector.

CBK has been engaging applicants on areas such as business models, consumer protection, and the integrity of proposed shareholders, directors, and management teams. The engagements seek to ensure applicants comply with the law and that customer interests are safeguarded, citing past concerns about predatory lending practices, unethical debt collection methods, and misuse of personal data by unregulated players.

Robust Market Performance and Consumer Impact

According to CBK, DCPs mostly issue loans digitally through USSD platforms, with products ranging from education and development loans to short-term personal loans, asset financing, and business loans. As of June 2025, licensed DCPs had granted 5.5 million loans valued at Sh76.8 billion, demonstrating the significant scale and economic impact of the regulated digital lending sector.

This substantial loan portfolio underscores the critical role that digital credit plays in Kenya’s economy, particularly in serving the financial inclusion needs of previously underserved populations who lack access to traditional banking services.

The digital lending boom builds on Kenya’s pioneering mobile money revolution, led by M-Pesa since 2007, which has created a foundation for digital financial services that now serves over 40 million Kenyans and processes transactions worth hundreds of billions of shillings annually.

Complete List of Newly Licensed Digital Credit Providers

Here is the full list of the 27 newly licensed DCPs:

1. Abito Limited
2. Aspire Lending Ltd
3. Ajax Credit Kenya Limited Aspire Lending Ltd
4. Bossrich Credit Limited
5. Brisk Credit Limited
6. Easy Asset Management Limited
7. Easyways Credit Limited
8. Elevate Credit Limited
9. Finseil Limited
10. Futureinno Digital Tech Limited
11. Hanis Capital Limited
12. Lasiri Capital Limited
13. Leaf Credit Limited
14. Little Limited trading as SpotIt
15. Mayflower Capital limited
16. Mednow Capital Limited
17. Moto Hope Capital Limited
18. Mwananchi Credit Ltd
19. Mular Credit Limited
20. Musoni Capital Limited
21. Otas Credit Limited
22. Platinum Credit Limited
23. Pembeni Cash Ltd
24. Reazilla DCP Limited
25. Suffice Ltd
26. Unidirect Ltd
27. Zaidi Pato Limited

Regulatory Response to Industry Challenges

The licensing and oversight framework was introduced after rising complaints from borrowers about unregulated digital lenders. Many unregulated digital lenders were accused of charging excessive interest rates, with some platforms demanding up to 876% annualized rates, compared to traditional bank rates that rarely exceed 20% annually.

A comprehensive Daily Nation investigation revealed that over eight million Kenyans—roughly 16% of the population—turn to digital loans every month, collectively borrowing an eye-popping Sh15 billion monthly. However, the easy access has created concerning patterns, with over 800,000 Kenyans caught in dangerous cycles of borrowing from one app to pay off another.

The predatory practices extended beyond excessive interest rates to include aggressive debt collection methods, with some borrowers receiving more than 1,000 phone calls from over 60 different numbers, threats to expose personal lives to family and employers, and unfair blacklisting with credit reference bureaus.

Legislative and Regulatory Framework Evolution

The regulatory crackdown began with the Central Bank of Kenya Amendment Act 2021, which became effective on December 23, 2021, empowering CBK to license and provide oversight of previously unregulated DCPs. Subsequently, the Central Bank of Kenya (Digital Credit Providers) Regulations, 2022 were gazetted on March 18, 2022.

The Business Laws (Amendment) Act 2024, effective January 2024, further strengthened CBK’s authority to supervise the sector and enforce ethical practices. Under these regulations, operating without a license carries penalties of up to Sh500,000, two years imprisonment, or both.

As of early 2025, the Office of the Data Protection Commissioner had received over 4,000 complaints about digital lenders misusing customer data, with only a fraction leading to formal investigations, highlighting ongoing enforcement challenges.

Consumer Protection and Market Impact

CBK said the new regime aims to curb predatory practices and restore trust in the digital lending market. The licensing of additional firms is expected to expand access to credit while ensuring higher standards of conduct and protecting vulnerable borrowers from exploitative terms.

CBK Governor Dr. Kamau Thugge recently noted that consumer complaints have fallen significantly from around 4,000 cases monthly to just a handful, indicating the positive impact of regulatory oversight on market conduct.

The regulations require licensed DCPs to maintain appropriate policies, procedures, and systems for customer information confidentiality, establish physical offices, and obtain prior written approval from CBK before opening, relocating, or closing branches.

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Kenya’s Fintech Ecosystem and Global Recognition

Kenya’s digital financial services sector has evolved into one of Africa’s most sophisticated ecosystems. The country secured $638 million in startup funding in 2024, the highest in Africa, and stands alongside Nigeria, South Africa, and Egypt as one of the continent’s top four fintech hubs.

With approximately 102 fintech startups accounting for 15% of all fintechs on the continent, Kenya’s ecosystem spans key sectors including payments and remittances (25.8%), lending and finance (22.6%), business administration (18.3%), and insurance (14%).

The digital payments market continues to expand with a projected compound annual growth rate (CAGR) of 14.1% between 2024 and 2028, expected to reach $14.54 billion by 2028.

Mobile Money Foundation and Financial Inclusion

Kenya’s digital lending success builds on the revolutionary impact of M-Pesa, launched in 2007, which transformed the country’s financial landscape. M-Pesa transactions now amount to approximately $246 billion per year, compared with an average of about $65 billion for the top two Kenyan banks.

The platform has facilitated access to formal financial services for nearly 83% of the Kenyan population, including access to virtual savings, credit, micro-insurance, and investments in government securities.

This financial inclusion revolution has had measurable economic impacts. Research indicates that mobile money adoption increased household savings, improved access to credit for small businesses, enhanced financial literacy, and brought more people into the formal economy, strengthening tax revenue and the overall financial sector.

Technology Infrastructure and Innovation

Kenya’s fintech growth is supported by robust technology infrastructure. Mobile device penetration exceeds 100%, with 66.4% smartphone penetration according to the Communications Authority of Kenya. Nearly half of Kenyan financial institutions have begun migrating to cloud computing, which will improve banks’ ability to scale and compete with fintechs.

The regulatory environment supports innovation through initiatives like the Nairobi International Financial Centre (NIFC) and CBK’s embrace of technological advancement, including support for open banking discussions and interoperability across mobile money platforms.

Challenges and Future Outlook

Despite regulatory progress, significant challenges remain. An estimated 278 digital credit providers are still awaiting CBK approval, with some expressing concern over prolonged processing times that may indicate capacity constraints at the central bank.

The sector continues to grapple with issues of over-indebtedness and loan stacking, where borrowers take multiple loans from different platforms. Research shows that digital credit increased the probability of household debt distress by 22% and reduced household income by about 16%.

CBK has urged pending applicants to submit outstanding documentation to facilitate completion of their reviews, while encouraging the public to report unregulated lenders through dcps@centralbank.go.ke.

Economic Impact and Development Goals

The digital credit sector’s growth aligns with Kenya’s broader development objectives under Kenya Vision 2030, which envisions the country as a regional financial hub. The expansion of regulated digital lending supports financial inclusion goals while contributing to economic growth through increased access to credit for small businesses and individuals.

The success of Kenya’s digital lending regulation could serve as a model for other African countries grappling with similar challenges of balancing innovation with consumer protection in rapidly evolving fintech markets.

Industry Collaboration and Standards

The Digital Lenders Association of Kenya (DLAK) advocates for industry best practices, including improved credit bureau reporting and responsible lending standards. The association represents digital lenders disbursing approximately $40 million monthly, highlighting the sector’s significant economic contribution.

Looking ahead, experts recommend that CBK implement capacity-based lending requirements, mandate integration of borrowers’ actual income and expense data in credit assessment algorithms, and establish performance thresholds that could trigger license revocation for persistently high default rates.

Conclusion: Balancing Innovation and Protection

Kenya’s digital lending sector stands at a critical juncture where regulatory oversight must balance innovation with consumer protection. The licensing of 153 DCPs represents significant progress in formalizing a sector that has expanded financial access for millions while addressing past abuses.

As Kenya continues to lead Africa’s digital finance transformation, the success of this regulatory framework will determine whether digital credit can fulfill its promise of safe, accessible financial services for all Kenyans while maintaining the innovation that has made the country a global fintech leader.

The ongoing challenge will be ensuring that the remaining hundreds of applicants can achieve compliance efficiently while maintaining the high standards necessary to protect consumers and preserve market integrity in one of the world’s most dynamic digital lending environments.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

5th September, 2025