Treasury tightens noose on rogue mobile lenders

The Government has moved to rein in rogue mobile lenders following mounting complaints from borrowers over predatory interest rates, hidden fees and misuse of personal data.

Appearing before the Senate, Cabinet Secretary for the National Treasury and Economic Planning, John Mbadi, said stricter licensing and enforcement measures are now in force to clean up Kenya’s fast-expanding digital credit market.

“These measures have been introduced to ensure compliance with the law and most importantly to safeguard customers’ interests and prevent rogue lending institutions from infringing consumer rights,” CS Mbadi told Senators.

Who can lend and who cannot

All Non-Deposit Taking Credit Providers (NDTCPs), previously known as Digital Credit Providers, must now be licensed by the Central Bank of Kenya (CBK).

Unlicensed apps risk being shut down.

The new framework imposes:

• governance standards
• capital and operational requirements
• mandatory consumer protection safeguards
• continuous supervisory oversight

The message from Treasury is clear: operate within the law or exit the market.

Data abuse under scrutiny

The CBK is coordinating enforcement with the Office of the Data Protection Commissioner to ensure compliance with the Data Protection Act.

Before obtaining a licence, digital lenders must:

• Secure a Data Protection compliance certificate
• Submit a formal data protection policy
• Demonstrate lawful, fair and transparent data handling

This follows widespread public outrage over loan apps that allegedly accessed borrowers’ phone contacts and used intimidation tactics to recover debts.

The CS said the tighter framework ensures only compliant entities remain operational.

The numbers behind digital lending

As of December 2025:

• Commercial banks: Sh4,369.6 billion (96.8 percent of total credit)
• Microfinance banks: Sh32.7 billion (0.8 percent)
• Digital credit providers: Sh110.5 billion (2.4 percent)

While digital lenders account for a relatively small share of total formal credit, they dominate the small-ticket, instant mobile loan space used by millions of Kenyans.

The accountability question

Mobile lending has expanded rapidly, filling gaps left by traditional banks.

But the speed of growth outpaced regulation.

Critics argue that some lenders exploited regulatory loopholes, charging excessive interest and employing aggressive recovery tactics.

The Treasury now says supervision has caught up.

Whether enforcement will be sustained--and whether rogue apps truly disappear--remains the test.

For borrowers, the crackdown could mean safer access to credit. For non-compliant lenders, the window to regularise or exit is closing.