Digital loans have become a popular way for Kenyans to access quick credit through their phones. However, borrowers have rights when dealing with digital lenders in Kenya.
The Central Bank of Kenya (CBK) regulates digital credit providers under the Central Bank of Kenya (Digital Credit Providers) Regulations, 2022.
A person cannot conduct digital credit business in Kenya without a CBK licence, unless another written law regulates the business.
How to Check If a Digital Lender Is Licensed
Before taking a digital loan, borrowers should check whether the provider has a valid CBK licence. CBK publishes a directory of licensed digital credit providers.
The directory helps consumers identify legitimate providers before borrowing. Digital credit providers must also disclose that they are regulated by CBK.
Digital Lenders Must Disclose Loan Costs
Borrowers should understand the full cost of a loan before accepting it. The regulations require digital credit providers to disclose important loan terms. These include the amount borrowed, interest rate, fees, charges and repayment information.
The provider must also give the customer the terms and conditions of the credit agreement. Therefore, borrowers should check the total amount payable before accepting a digital loan.
Borrowers Have Data Privacy Rights
Digital lenders may collect customer information for legitimate lending purposes. However, they must handle personal data in line with Kenya’s data protection laws.
The regulations restrict providers from collecting information that is not reasonably required for purposes such as credit appraisal, approval, disbursement and collection.
The Office of the Data Protection Commissioner (ODPC) also provides guidance on data protection in digital lending. Borrowers who believe a lender has unlawfully processed or misused their personal information can lodge a complaint with the ODPC.
Can Digital Lenders Harass Borrowers?
Borrowing money does not remove a customer’s right to privacy and fair treatment. Kenya introduced digital lending regulations partly to address concerns over unethical debt collection and misuse of personal information.
Borrowers should document threatening messages, inappropriate calls and other questionable collection practices.
They can first raise the issue through the lender’s complaint mechanism. Data protection concerns can also be reported to the ODPC.
Can an Unlicensed Lender Take You to Court?
This issue requires caution. CBK licensing is a legal requirement for digital credit providers covered by the regulations. However, borrowers should not assume that an unpaid loan automatically becomes unenforceable simply because they believe the lender is unlicensed.
A December 2025 High Court decision involving Advancly Embed Technologies Limited considered an argument concerning CBK licensing and debt recovery.
The court noted that questions about whether the company was operating as an unlicensed digital credit provider involved factual and evidentiary issues.
Therefore, borrowers facing court proceedings should seek qualified legal advice and raise any licensing concerns through the proper legal process.
What Should Borrowers Do?
If you have a dispute with a digital lender:
- Check whether the lender appears on CBK’s licensed-provider directory.
- Read the loan agreement before accepting credit.
- Keep electronic receipts and payment records.
- Save threatening or inappropriate messages.
- Document suspected misuse of personal data.
- Use the lender’s official complaint channel.
- Report data protection concerns to the ODPC.
- Seek legal advice if the dispute reaches court.
Why Borrower Rights Matter
Digital lending offers convenience, but quick access to credit should not mean giving up basic consumer protections. Understanding CBK rules can help borrowers identify legitimate providers and recognize questionable lending or debt-collection practices.
Before accepting a digital loan, check the lender, understand the cost and know how your personal information will be handled.
Bottom Line
Digital lenders in Kenya operate within a regulatory framework overseen by CBK. Borrowers should therefore understand their rights before taking a loan.
From licensing and transparent loan terms to data protection and debt collection, informed borrowers are better positioned to protect themselves. If a dispute arises, keep your records and use the appropriate complaint or legal channels.
