A section of digital lenders wants the Central Bank of Kenya (CBK) to raise the minimum capital or balance sheet size for non-deposit-taking credit businesses to Sh50 million, up from the proposed Sh20 million, to weed out ‘speculators’.
The Digital Financial Services Association of Kenya (DFSAK) says the higher entry level will help sift out idle players who already hold approval from the CBK without conducting any meaningful business.
The CBK, on its part, has set the threshold for licensing at Sh20 million, but players failing to meet the entry requirement can still register with the banking sector regulator.
The push for a higher licensing threshold forms part of nine key amendments sought by the digital lenders lobby as input to the draft Central Bank of Kenya (Non-Deposit Taking Credit Providers) Regulations, 2025.
“The reasoning is to separate the wheat from the chaff. The challenge has been that a lot of the licenses issued are to entities that are not even doing business and are just briefcase outfits,” said DFSAK chairman Kevin Mutiso.
“This would separate players that are serious from those who are not.”
CBK is set to oversee all forms of credit-only businesses, including buy-now-pay-later, higher purchase, credit guarantees, peer-to-peer lending, and pay-as-you-go arrangements.
Digital credit providers (DCPs) are to be included in the new regulations, with yet-to-be-licensed players being expected to align with the fresh requirements. An estimated 574 digital lenders had pending applications at the CBK as of June 5.
A person seeking to conduct a non-deposit-taking credit business shall be required to have a capital base of Sh20 billion or have a lending book of an equivalent value before obtaining a CBK license.
Those who don’t meet this threshold can still register with the CBK, but shall be required to convert their registration into a license upon meeting the lower limit.
Digital lenders also want CBK to end unnecessary bottlenecks, while players have lamented regulatory overreach where the CBK can summon players alongside two other oversight bodies- the Competition Authority of Kenya (CAK) and the Office of the Data Protection Commissioner.
Players warn that lack of closer ties to the CBK has led to delayed strategic decisions, including capital allocation and the launch of new products.
DFSAK says the CBK has, for instance, taken too long to respond to member concerns when engaged.
“If we are paying an amount to the CBK to maintain an annual license, then we must have better relationship management with the apex bank because that is the right thing to do,” added Mr Mutiso.
CBK has so far licensed 126 DCPs and has at least 574 applications, which will now be assessed for approval under new regulations.
The already licensed digital lenders will not be required to seek a new license.
