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CBK digital lending licence queue hits 605 on high investor appetite
Despite tighter regulation and slow approvals, investor appetite for digital credit remains strong, with applications far outpacing licences issued since 2022.
At least 605 digital lenders are awaiting Central Bank of Kenya (CBK) clearance as the New Year begins, signalling sustained investor interest in the fast-growing digital credit market despite tighter regulatory scrutiny.
The regulator announced last Tuesday the licensing of 42 additional Digital Credit Providers (DCPs) in the latest round of approvals, which continues to trail the volume of applications.
Digital lenders offer short-term loans at annualised rates that are significantly higher than those charged by commercial banks, using credit reference bureau checks to assess and manage default risk.
Tuesday’s approvals—the final batch for 2025—followed the licensing of 27 firms in September and 41 in June, underscoring the slow pace of approvals that has resulted in 195 licensed DCPs from more than 800 applications received since March 2022.
This means more than 605 applicants, or 75.6 percent of entities seeking to offer digital credit in Kenya, remain on the waiting list, pointing to sustained investor interest in the sector.
Kevin Mutiso, chairman of the Digital Financial Services Association of Kenya (DFSAK), a lobby group for digital lenders, said investor interest has increased due to higher returns and the regulatory clarity introduced in 2022.
CBK introduced the CBK (Digital Credit Providers) Regulations, 2022, which, among other provisions, bar digital lenders from listing defaulters of amounts below Sh1,000 with credit reference bureaus.
“The investor appetite is high. The returns are good and it is partly due to the stability brought about by the regulations,” Mr Mutiso said in a phone interview.
“CBK has been licensing 40 to 50 new DCPs every quarter. We are not unhappy with that when we compare it with the pace we had in 2024.”
Digital loan volumes jump
CBK data show that as of November 2025, licensed DCPs had issued 6.6 million loans valued at Sh109.8 billion. This marks a near doubling from gross outstanding loans of Sh55 billion in December 2024, up from Sh28.9 billion in 2023.
In 2023, CBK licensed 32 DCPs, followed by 53 in 2024 and a further acceleration in 2025, bringing cumulative approvals to 195.
CBK said it has been working closely with applicants in reviewing their submissions, adding that pending approvals are largely due to missing documentation, including details on shareholding structures and management teams.
“The focus of the engagements with DCPs has been inter alia on business models, consumer protection and fitness and propriety of proposed shareholders, directors, and management. This is to ensure adherence to the relevant laws and, importantly, that the interests of customers are safeguarded,” CBK said in a statement.
“We urge these applicants to submit the pending documentation expeditiously to enable completion of the review of their applications.”
DCPs predominantly conduct lending activities digitally through mobile phones. Their products include education loans, development loans, short-term personal loans, asset financing and business loans.
Digital loans have gained popularity due to the ease of application for borrowers seeking quick cash for emergencies without requiring collateral.
CBK began regulating the sector to close a legal gap that had attracted public outcry over loan pricing and aggressive debt recovery practices.
Many customers had raised concerns about predatory behaviour, particularly high costs, unethical debt collection practices and abuse of personal information.
“The licensing and oversight of DCPs as indicated previously, was precipitated by concerns raised by the public about the predatory practices of the unregulated DCPs, and in particular, their high cost, unethical debt collection practices, and the abuse of personal information,” CBK said.
