CBK Targets Buy-Now-Pay-Later Firms in New Law
The Draft Non-Deposit Taking Credit Providers Regulations, 2025, would grant the CBK licensing and regulatory powers over such firms
In 2024, the CBK Act was revised to place all NDTCPs under supervision. "Digital" was replaced with "non-deposit-taking" to characterize the scope. Photo/ KBC Digital
By Juliet Jerotich
The Central Bank of Kenya (CBK) has started public consultations on a draft law to govern non-deposit-taking credit providers. The proposal is aimed at companies offering services such as buy-now-pay-later (BNPL) financing, which has experienced rapid expansion among consumers in Kenya.
The Draft Non-Deposit Taking Credit Providers Regulations, 2025, would grant the CBK licensing and regulatory powers over such firms. Investors seeking a license would need a minimum initial capital of Ksh 20 million.
The proposed law comes as BNPL services are becoming more popular during tough economic times. The contracts allow consumers to purchase goods and pay later, typically at high interest. Some of the goods that are typically bought under BNPL terms include solar panels, motorbikes, and mobile phones. The practice has been employed to burden consumers with expensive credit, critics contend.
Research and Markets puts Kenya’s BNPL market growing 13.6 percent this year to Ksh 152 billion. By 2030, the same will be Ksh 240 billion.
The regulations would also cover asset financing, pay-as-you-go plans, peer-to-peer lending, and other credit products offered outside the conventional banking parameters. Any non-deposit-taking credit provider (NDTCP) with credit over Ksh 20 million would need to apply for a CBK license to resume operations.
The draft provides that “A person shall not carry on or conduct non-deposit-taking credit business in Kenya unless licensed or registered by the Bank… or regulated under any other written law.”
CBK explains that the move is a follow-up on experience from the Digital Credit Providers Regulations, 2022. That framework addressed issues like extortionate loan costs, harassment while collecting debts, and abuse of personal data. Even though 126 lenders have since been licensed digitally, CBK comments on persisting lacunae in the legal and regulatory environment.
In 2024, the CBK Act was revised to place all NDTCPs under supervision. “Digital” was replaced with “non-deposit-taking” to characterize the scope.
To counter money laundering, the bill would require investors to disclose the source of their capital.
The Kenyans have until September 5, 2025, to comment. The regulations will be submitted to the Cabinet for approval once they are reviewed.
About Author
