New Fintech Regulations Set to Shape Nairobi’s Digital Lending Market

In March 2025, Kenya rolled out new Digital Credit Providers (DCP) regulations, placing Nairobi’s fast-growing digital lending sector under tighter scrutiny. The reforms stem from amendments to the Central Bank of Kenya Act (December 2024), which reclassified digital lenders as non-deposit-taking credit providers (NDTCs). This change brought them directly under CBK oversight, with a compliance deadline set for June 28, 2025.
The regulations were introduced to address widespread concerns over predatory lending practices, opaque loan terms, and privacy infringements affecting more than eight million borrowers in Kenya. Under the new framework, digital lenders must meet stricter licensing requirements, adopt transparent interest rate disclosures, and implement robust data protection measures. The CBK also emphasized consumer protection, mandating fair debt collection practices and stronger governance structures.
For Nairobi’s fintech ecosystem, these reforms are expected to reshape the digital lending market by encouraging responsible lending and improving trust among borrowers. Analysts note that while compliance costs may rise for startups, the regulations will likely attract more institutional investors and strengthen the credibility of Kenya’s fintech sector. The Finance Act 2025, enacted in June, further reinforced these changes by introducing tax adjustments and compliance obligations for fintech firms and virtual asset service providers.
Looking ahead, industry leaders believe the new regulatory environment will push fintech firms to innovate responsibly, integrating AI-driven credit scoring, blockchain-based loan verification, and digital identity systems. Nairobi County officials argue that by embedding transparency and consumer protection into digital lending, the city can accelerate financial inclusion while positioning itself as East Africa’s fintech hub.