Kenya’s Digital Credit Providers Face New Consumer Protection Rules

The Central Bank of Kenya has introduced stringent regulations for digital lenders, requiring transparent pricing, credit limits based on income, and a 7-day cooling-off period. Effective May 2024, the rules target over 170 licensed fintechs offering mobile-based loans. Lenders must now display APR (Annual Percentage Rate) and obtain explicit consent before accessing phone data. Repeat borrowing will be capped at three cycles. The move follows public outcry over harassment and over-indebtedness. CBK says 40 lenders have already complied, while non-compliant ones risk license revocation. Consumer Federation of Kenya welcomed the reforms as a win for financial inclusion with safeguards.