MPs have directed CBK to revise proposed regulations for non-deposit-taking credit providers.
The National Assembly committee orders CBK to revise proposed lending regulations, questioning steep fines and open-ended powers.
The National Assembly’s Committee on Delegated Legislation has halted proposed CBK lending rules over penalties and regulatory powers. The decision delays tighter oversight of lenders and new protections for borrowers.
On November 12, the committee directed the Central Bank of Kenya to suspend the rollout. MPs also asked the regulator to work with parliamentary legal counsel to review and redraft the provisions.
CBK said the Non-Deposit-Taking Credit Providers Regulations, 2025, would bring more lending businesses under its supervision. The proposals also aim to regulate loan issuance and protect Kenyans from exploitative lending practices.
Why MPs challenged the CBK lending rules
The committee raised concerns about excessive administrative powers, penalties it considered unlawful, and drafting inconsistencies. In particular, MPs questioned provisions allowing CBK to demand additional documents or prescribe other functions without clear limits.
Anabkoi MP Samuel Chepkonga argued that lenders must know in advance what the law requires. He also warned that vague provisions could undermine public participation by leaving decisions to the regulator’s discretion.
Meanwhile, the committee challenged a proposed penalty of up to Ksh2 million for violations. Chepkonga said the amount exceeded the ceiling under the Statutory Instruments Act, making the provisions legally inconsistent.
The draft would alternatively allow a fine of three times the monetary gain made or loss avoided, whichever was higher. It also proposed a Ksh10,000 daily fine for continuing violations, alongside licence suspension, disqualification or sanctions.
Licensing and debt collection restrictions
The proposals cover mobile loan applications, digital lenders, buy-now-pay-later businesses, asset financing companies and other non-deposit-taking credit providers. Businesses with initial capital above Ksh20 million would need to apply for a CBK licence.
Those with initial capital below Ksh20 million would instead apply for registration. Both routes would require lenders to obtain the central bank’s approval before operating.
For borrowers, the draft would prohibit threats, violence, insults and abusive language during debt collection. Lenders would also face restrictions on accessing borrowers’ phone contacts to shame them over unpaid loans.
In addition, the proposals would bar lenders from recovering charges absent from the loan agreement. However, the committee’s suspension delays these safeguards while CBK reviews the disputed provisions with parliamentary legal counsel.
