Before consumer protection laws were passed, any lender could run a digital credit business. 

Kenya has approved the operation of 17 new digital credit providers (DCPs), including Autochek – a car loan facility startup – one year after it licensed 32 digital credit providers.  

In a move signalling a crackdown on predatory practices, the Central Bank of Kenya (CBK) continues to scrutinise applications from digital lenders, issuing licenses to just 51 lenders, so far. This stringent vetting process follows the need to address borrower concerns, such as unethical loan collection techniques.


In 2022, through the CBK, Kenya purged all digital lending companies for operating without licences. The directive implied that these companies, which had grown to hundreds, had to cease operations immediately and apply for a permit from the CBK. The licences were structured around a new law, the CBK (Digital Credit Providers) Regulations, 2022, which introduced data protection laws to safeguard borrowers from illegally using their personal information.

Before these changes, Kenya had hundreds of unlicensed digital lending platforms. However, concerns about high-interest rates, personal data abuses, and unethical debt collection practices compelled the government to act. “The licensing and oversight of digital credit providers (DCPs) was precipitated by concerns raised by the public about the predatory practices of the unregulated DCPs,” the CBK said in a statement.

After the law was passed, only a few digital lenders could provide their services to Kenyans, including Branch, which operates in other markets such as Nigeria and Tanzania, and Tala. Then, over 480 digital lenders applied for the license, indicating the lucrative nature of the online lending business in the country. 


The regulatory change was a response to public outcry over the unchecked practices of digital lenders. These companies charged excessive interest rates, sometimes up to 400% per year, among other unethical business practices. 

Under the new law, the CBK (Digital Credit Providers) Regulations, 2022, all digital credit must register as data controllers and processors with the Office of Data Protection (ODPC). Credit providers must also provide evidence of their source of funds as an anti-money laundering directive.

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