President William Ruto signed into law the Central Bank of Kenya (Amendment) Bill on July 12, 2026, enacting a significant overhaul of the country's banking regulatory framework. The new legislation grants the central bank expanded supervisory powers over digital credit providers and payment systems, formalizing a regulatory approach that had been evolving since 2022.
The law establishes a comprehensive licensing regime for digital lenders, requiring them to obtain formal approval from the CBK. It also mandates that these providers submit to the same anti-money laundering and consumer protection standards as traditional banks. This move follows a period of heightened scrutiny of the digital credit sector, which has faced criticism over high-interest rates, aggressive debt collection practices, and data privacy concerns.
"This law provides a stable and predictable regulatory environment," said Kamau Thugge, Governor of the Central Bank of Kenya, in a statement. "It ensures that all players in the financial sector operate under clear rules that protect consumers while fostering innovation." The CBK had previously brought digital lenders under its oversight through regulations in 2022, but the new act provides a stronger statutory foundation for that authority.
The legislation also clarifies the CBK's role in overseeing payment systems, including mobile money services. Kenya is home to M-Pesa, the pioneering mobile money platform operated by Safaricom, which has become a cornerstone of the national economy and a model for financial inclusion across Africa. The new law formally integrates the oversight of such critical payment infrastructure into the central bank's mandate, aiming to ensure systemic stability.
Industry observers note that the reforms align with broader trends across Africa, where regulators are grappling with the rapid growth of fintech. Countries like Nigeria, Ghana, and South Africa have also been refining their regulatory approaches to digital finance. The Kenyan law seeks to balance the promotion of financial innovation, which has been a key driver of inclusion, with the need to mitigate risks to consumers and the broader financial system.
Some digital lenders have expressed concerns about the potential compliance costs and operational constraints of the new regime. However, proponents argue that clear regulation will legitimize the sector, attract more structured investment, and ultimately benefit reputable operators by weeding out predatory practices. The law includes provisions for the CBK to revoke licenses of providers that violate the set standards.
The enactment comes as Kenya continues to position itself as a leading financial technology hub in East Africa. The government has emphasized the digital economy as a pillar of its economic agenda. By formalizing the regulatory landscape, the authorities aim to build greater confidence among users, investors, and international partners, securing the long-term sustainability of Kenya's dynamic fintech ecosystem.