The National Assembly's Committee on Delegated Legislation has told the Central Bank of Kenya (CBK) to stop rolling out its new credit rules for non-bank lenders. The directive followed a committee meeting on Thursday, November 12. MPs want CBK officials to work with parliamentary legal counsel to review and redraft the disputed clauses before the rules take effect.
Pulse Live Kenya reported that the rules were published as Legal Notice No.191 on September 29, 2026. They replace the Digital Credit Providers Regulations of 2022. The new framework reaches beyond mobile loan apps. It also covers buy-now-pay-later, asset financing, stock-now-pay-later, pay-as-you-go deals, credit guarantees and some peer-to-peer lending. Banks, licensed microfinance institutions and regulated SACCOs generally fall outside it.
Under the rules, lenders with initial capital of KSh 20 million or more would need a CBK licence. Smaller ones would have to register. According to Pulse, existing providers have until March 29, 2027 to apply. They can keep operating while CBK reviews their applications.
For borrowers, the rules promised several changes. Kenyans.co.ke and The Eastleigh Voice reported that lenders would be banned from threatening borrowers or using abusive language. They could not access borrowers' phone contacts to shame them over unpaid loans. Nor could they recover charges left out of the loan agreement. Repayments would go to principal first, then fees, then interest. Lenders would also have to give 30 days' notice before selling a borrower's movable property held as security.
MPs said the rules give CBK too much open-ended power. They pointed to clauses that let the regulator demand any other documents or prescribe any other functions without clear limits. "What we do not allow you is to have open-ended discretion. Kenyans must be given notice and know what the law requires of them," Anabkoi MP Samuel Chepkonga said.
The penalties were the other sticking point. Lenders could be fined up to KSh 2 million or three times the gain made or loss avoided, whichever is higher. A further KSh 10,000 a day would apply while a violation continues. Senior officers could face personal fines of up to KSh 250,000. Chepkonga said the KSh 2 million fine exceeds the ceiling in the Statutory Instruments Act and makes the regulations void. Pulse noted, however, that Section 57(4) of the amended Central Bank of Kenya Act gives CBK express power to set penalties on that formula. The committee also said the drafting was unnecessarily complicated.
The directive does not cancel the rules. Pulse said no formal annulment of Legal Notice No.191 had been reported by Friday. The committee can recommend annulling all or part of a regulation, but only a resolution of Parliament makes it formal.