The Central Bank of Kenya (Digital Credit Providers) Regulations

These Regulations may be cited as the Central Bank of Kenya (Digital Credit Providers) Regulations, 2022.

AI-assisted research synopsis — verify against the official legal text below.

Jurisdiction: Kenya
Instrument: Notice
Citation: Legal Notice 46 of 2022
Version: Undated source snapshot
Language: en

Source attribution: Source: Kenya Law

Statute overview

About this statute

These Regulations may be cited as the Central Bank of Kenya (Digital Credit Providers) Regulations, 2022. Applies to an institution licensed under the Banking Act (Cap. 488). Defines terms used in these Regulations including Act, Bank, charges, credit information, customer, deposit, non-performing loan, senior officer, and significant shareholder. Digital credit providers must obtain prior written approval from the Bank before amalgamations or transfers of assets and liabilities, need not obtain prior approval for ordinary-course transactions, must notify the Bank at least thirty days before certain third-party investment or financing arrangements, and the Bank may require additional information. Persons must not operate digital credit business in Kenya unless licensed by the Bank; those wishing to operate must apply to the Bank in Form CBK DCP 1 and provide the documents listed in Section 4(3).

Read the provisions Ask with citations

Search within this statute

Search all stored provisions in this version.

Legal text

Provisions of The Central Bank of Kenya (Digital Credit Providers) Regulations

Showing 57 of 57

Part I

PRELIMINARY

1
PRELIMINARY - 1. Citation

AI-assisted research summary: These Regulations may be cited as the Central Bank of Kenya (Digital Credit Providers) Regulations, 2022.

Section 1. Citation Section These Regulations may be cited as the Central Bank of Kenya (Digital Credit Providers) Regulations, 2022.
2
PRELIMINARY - 2. Application

AI-assisted research summary: Applies to an institution licensed under the Banking Act (Cap. 488).

Section 2. Application Section an institution licensed under the Banking Act (Cap. 488);
3
PRELIMINARY - 3. Interpretation

AI-assisted research summary: Defines terms used in these Regulations including Act, Bank, charges, credit information, customer, deposit, non-performing loan, senior officer, and significant shareholder.

Section 3. Interpretation Section In these Regulations, unless the context otherwise requires— "Act" means the Central Bank of Kenya Act; "Bank" means the Central Bank of Kenya; "charges" includes all the payments that a customer makes, is required to make, or agrees to make to a digital credit provider in consideration of the loan by the digital credit provider to the customer, and all interest, fees, expenses and costs associated with the provision of the loan; "credit information" means any positive or negative information relating to an individual’s or entity’s credit worthiness, credit standing, credit capacity, or history or profile with regard to credit, assets, and any financial obligations; "customer" means a person who obtains digital credit from a digital credit provider; "deposit" means a sum of money received or paid on terms under which it shall be repaid, with or without interest or a premium, and either on demand, or at a time or in circumstances agreed by or on behalf of the person making the payment and the person receiving it; "non-performing loan" means a loan in which the principal or interest is due and unpaid after the due date as per the contract between the digital credit provider and the customer; "senior officer" means a manager or officer responsible for a significant unit of a digital credit provider; "significant shareholder" means a person other than the Government or a public entity, who holds directly or indirectly or otherwise has a beneficial interest in ten percent or more of the share capital of a digital credit provider.

Part II

LICENSING OF DIGITAL CREDIT PROVIDERS

10
LICENSING OF DIGITAL CREDIT PROVIDERS - 10. Amalgamations and transfer of assets and liabilities

AI-assisted research summary: Digital credit providers must obtain prior written approval from the Bank before amalgamations or transfers of assets and liabilities, need not obtain prior approval for ordinary-course transactions, must notify the Bank at least thirty days before certain third-party investment or financing arrangements, and the Bank may require additional information.

Section 10. Amalgamations and transfer of assets and liabilities Section 10(1) A digital credit provider shall not enter into an amalgamation or an arrangement to transfer all or any part of its assets and liabilities to another entity without the prior written approval of the Bank. Section 10(2) Notwithstanding paragraph (1), a digital credit provider shall not require the prior approval of the Bank to undertake transactions in the ordinary course of business, including asset disposals in the ordinary course of business. Section 10(3) A digital credit provider shall notify the Bank at least thirty days before entering into any agreement or arrangement with a third party for purposes of investing in the digital credit provider or financing the activities of the digital credit provider. Section 10(4) The Bank may direct a digital credit provider to submit such additional information and documents as it may consider necessary for purposes of considering any transaction, agreement or arrangement under this Regulation.
4
LICENSING OF DIGITAL CREDIT PROVIDERS - 4. Licensing

AI-assisted research summary: Persons must not operate digital credit business in Kenya unless licensed by the Bank; those wishing to operate must apply to the Bank in Form CBK DCP 1 and provide the documents listed in Section 4(3).

Section 4. Licensing Section 4(1) A person shall not establish or carry out digital credit business in Kenya or otherwise hold himself out as carrying out digital credit business in Kenya unless that person is licensed by the Bank in accordance with these Regulations, or is a person whose digital credit business is regulated under any other written law. Section 4(2) A person who wishes to carry out digital credit business in Kenya shall apply to the Bank for a licence in Form CBK DCP 1 set out in the First Schedule. Section 4(3)(a) certified copy of the certificate of incorporation of the applicant; Section 4(3)(b) a certified copy of the Memorandum and Articles of Association of the applicant; Section 4(3)(c) notification of the applicant’s registered address; Section 4(3)(d) a certified copy of the Memorandum and Articles of Association of any corporate body that has a significant shareholding in the applicant; Section 4(3)(e) a certified copy of the constitutive documents of an unincorporated body that has a significant shareholding in the applicant; Section 4(3)(f) a description of the information and communication technology system to be used in the applicant’s operations and an independent assurance on the systems; Section 4(3)(g) a description of delivery channels or platforms to be deployed by the applicant; Section 4(3)(h) a description of, and terms and conditions of credit products and services which the applicant intends to provide; Section 4(3)(i) an agreement with a telecommunication or other service provider for provision of the channel or platform for the provision of digital credit; Section 4(3)(j) the applicant’s Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) policies and procedures; Section 4(3)(k) the applicant’s data protection policies and procedures; Section 4(3)(l) the applicant’s consumer redress, mechanisms policies and procedures; Section 4(3)(m) a description and evidence of sources of funds to be invested in the applicant; Section 4(3)(n) a non-refundable application fee set out in the Second Schedule; Section 4(3)(o) the names and addresses of the shareholders in Form CBK DCP 1 set out in First Schedule; Section 4(3)(p) duly filled fit and proper forms for the directors, chief executive officer and senior officers and significant shareholders in Form CBK DCP2 and Form CBK DCP 3, respectively; Section 4(3)(q) the applicant’s credit policy, code of ethics and market conduct; Section 4(3)(r) the applicant’s pricing model and parameters; Section 4(3)(s) the applicant’s corporate governance policy; Section 4(3)(t) certificate of good conduct, tax compliance certificate and credit reference bureau report for each of the digital credit provider’s individual significant shareholders, directors, chief executive officer and senior officers; Section 4(3)(u) a sworn declaration signed by every officer as specified in the application form; and Section 4(3)(v) any other information as may be required by the Bank. Section 4(4)(a) be a company incorporated under the Companies Act; and Section 4(4)(b) ensure that its significant shareholders, directors, chief executive officer and senior officers meet the fit and proper criteria set out in the Third Schedule. Section 4(5) A person who contravenes paragraph (1) shall be liable to the penalty prescribed in section 33S(10) of the Act.
5
LICENSING OF DIGITAL CREDIT PROVIDERS - 5. Issuance of a licence

AI-assisted research summary: Section 5 requires the Bank to grant licences to qualified applicants within 60 days, allows the Bank to impose conditions, requires publication of licensed providers, and requires annual fee payment and compliance returns by digital credit providers.

Section 5. Issuance of a licence Section 5(1) The Bank shall, if satisfied that the applicant meets the requirements of these Regulations, grant a licence to the applicant, within sixty days of submission of a complete application. Section 5(2)(a) the history of the applicant; Section 5(2)(b) the professional and moral suitability of the persons proposed to manage or control the digital credit provider; Section 5(2)(c) the sources and evidence of funds to be invested by or in the digital credit provider; and Section 5(2)(d) the public interest. Section 5(3) The Bank may grant a licence to an applicant who meets the requirements of these Regulations subject to such conditions as the Bank may consider necessary which may be varied from time to time. Section 5(4) The Bank shall publish the name of every licensed digital credit provider in the Gazette and in the Bank’s website within thirty days of grant of licence. Section 5(5) A licence granted under these Regulations shall remain valid unless earlier suspended or revoked by the Bank in accordance with these Regulations. Section 5(6) A digital credit provider shall on or before the thirty-first day of December every year pay annual fees set out in the Second Schedule in such manner as the Bank may specify. Section 5(7) A digital credit provider shall on or before the thirty-first day of December every year submit a return to the Bank certifying its compliance with the Act and these Regulations in such manner as the Bank may specify. Section 5(8) The Bank shall before the thirty-first day of March in each year, publish the names and addresses of all licensed digital credit providers in the Gazette and the Bank’s website.
6
LICENSING OF DIGITAL CREDIT PROVIDERS - 6. Licence not transferable

AI-assisted research summary: The licence granted under regulation 5 shall not be transferred, assigned or encumbered without the Bank's prior written approval.

Section 6. Licence not transferable Section The licence granted under regulation 5 shall not be transferred, assigned or encumbered in any way without prior written approval of the Bank.
7
LICENSING OF DIGITAL CREDIT PROVIDERS - 7. Fit and proper obligations

AI-assisted research summary: Digital credit providers must notify the Bank at least thirty days before certain changes; the Bank must certify fit and proper persons and has powers to assess suitability, direct disposal of shares and disqualify persons who do not meet criteria.

Section 7. Fit and proper obligations Section 7(1) A digital credit provider shall notify the Bank of any intended changes in its significant shareholding, board or management structure, or the appointment of a new director, chief executive officer or a senior officer at least thirty days before the effective date of such changes or appointments. Section 7(2) No person shall be a significant shareholder, director, chief executive officer or a senior officer of a digital credit provider unless the Bank has certified the person as fit and proper in accordance with the criteria set out in the Third Schedule. Section 7(3) The Bank may, from time to time, where it considers it necessary, carry out an assessment of the professional and moral suitability of director, a chief executive officer, significant shareholder or a senior officer of a digital credit provider. Section 7(4) The Bank may direct a significant shareholder who is considered by the Bank as not fulfilling the fit and proper criteria to dispose of all of their shares in a digital credit provider within such period as the Bank may specify. Section 7(5) The Bank may disqualify any person from holding the position of director, chief executive officer or senior officer or holding any other office in a digital credit provider if that person is determined not to meet the fit and proper criteria.
8
LICENSING OF DIGITAL CREDIT PROVIDERS - 8. Activities of a digital credit provider

AI-assisted research summary: Digital credit providers may provide credit; they must not invite or collect deposits in any form while carrying out digital credit business; the Bank may approve other activities from time to time.

Section 8. Activities of a digital credit provider Section 8(1)(a) provision of credit; and Section 8(1)(b) any other activity as may be approved by the Bank from time to time. Section 8(2) A digital credit provider shall not invite or collect deposits in any form, including the taking of cash collateral as security for loans, in the course of carrying out digital credit business. Section 8(3) A digital credit provider who contravenes the provisions of paragraph (2) shall be liable to assessment of penalties and other administrative sanctions as provided for in these Regulations, including revocation of the digital credit provider’s licence.
9
LICENSING OF DIGITAL CREDIT PROVIDERS - 9. Suspension or revocation of licence

AI-assisted research summary: The Bank may suspend or revoke a digital credit provider's licence for listed grounds and must follow procedures including written notice, opportunity to be heard, specifying suspension period, publishing names, and directing transfer of customer records or permitting wind-down under conditions.

Section 9. Suspension or revocation of licence Section 9(1)(a) does not meet or has contravened any of the licensing conditions; Section 9(1)(b) fails to pay annual fees or a monetary penalty that is imposed by the Bank; Section 9(1)(c) is found to have given false information during the licence application; Section 9(1)(d) ceases to carry on the business of a digital credit provider; Section 9(1)(e) goes into liquidation or an order is issued for its winding up; Section 9(1)(f) violates anti-money laundering laws or combating the financing of terrorism laws; Section 9(1)(g) has contravened any of the provisions of the Act or any regulations made thereunder relating to digital lending; or Section 9(1)(h) otherwise conducts its business in a manner detrimental to the interests of its customers or members of the public. Section 9(2) The Bank shall before suspending or revoking a licence inform the licensee in writing of the intended suspension or revocation and give the licensee an opportunity to be heard. Section 9(3) The Bank shall specify the reasons for and the period of suspension of a digital credit provider’s licence, and shall at the expiry of that period, lift the suspension or revoke the licence as the Bank considers appropriate. Section 9(4) The Bank shall cause the names of digital credit providers whose licences have been suspended or revoked to be published in the Gazette within thirty days of the suspension or revocation. Section 9(5)(a) require the digital credit provider to transfer to each customer the records relating to the affairs of the customer held at any time, in such manner, as the Bank may specify in the notice; or Section 9(5)(b) permit the digital credit provider, subject to such conditions as the Bank may specify in the notice, to carry on business operations for the purpose of closing down the business connected with the revocation.

Part III

GOVERNANCE

11
GOVERNANCE - 11. Corporate governance

AI-assisted research summary: Digital credit providers must practice sound corporate governance principles, including ethics and integrity, good reputation and legitimacy, sound risk management and compliance with the law.

Section 11. Corporate governance Section A digital credit provider shall practice sound corporate governance principles based on ethics and integrity, good reputation and legitimacy, sound risk management and compliance with the law.
12
GOVERNANCE - 12. Place of business

AI-assisted research summary: Digital credit providers must have at least one registered physical office, must notify the Bank at least thirty days before opening/relocating/closing a branch, and must prominently display their licence in all places of business.

Section 12. Place of business Section 12(1) A digital credit provider shall have at least one registered physical office in accordance with the requirements of the Companies Act, 2015 ( No. 17 of 2015 ). Section 12(2) A digital credit provider shall not open, relocate or close a branch or place of business without prior written notification to the Bank, at least thirty days before the opening, relocation or closure. Section 12(3) A digital credit provider shall prominently display a copy of its licence in all its places of business.
13
GOVERNANCE - 13. Confidentiality

AI-assisted research summary: Digital credit providers must keep customer information and transactions confidential, must not share such information except with customer consent or where required/permitted by law, and directors/officers/employees/agents must protect confidentiality and not disclose secrets except in the proper course of duty with written consent.

Section 13. Confidentiality Section 13(1) A digital credit provider shall put in place appropriate policies, procedures and systems to ensure the confidentiality of customer information and transactions. Section 13(2) A digital credit provider shall not share customer information with any other person except with the customer’s consent, or as may be required or permitted under any written law. Section 13(3) The directors, officers, employees and agents of a digital credit provider shall protect the confidentiality of customer information and transactions. Section 13(4) A director, officer, employee or agent of a digital credit provider shall not during, or upon and after termination of engagement or employment with the digital credit provider, except in the proper course of his duty and with the digital credit provider’s written consent, divulge or make use of any secrets, copyright material, or any correspondence, accounts of the digital credit provider or its customers.

Part IV

CREDIT INFORMATION

14
CREDIT INFORMATION - 14. Exchange of credit information

AI-assisted research summary: Digital credit providers must disclose customer credit information to licensed credit reference bureaus when reasonably required; they may obtain such information; they must not submit negative information for outstanding amounts of one thousand shillings or less; they must provide pre-listing notice (normally at least 30 days, but not less than 7 if contract permits) and notify customers within 30 days after furnishing information.

Section 14. Exchange of credit information Section 14(1) Notwithstanding any other provision in these Regulations, a digital credit provider shall disclose both positive and negative credit information of its customers to licensed credit reference bureaus, where such information is reasonably required for the discharge of the functions of the digital credit provider or the licensed credit reference bureaus. Section 14(2) A digital credit provider may obtain credit information of its customers from a licensed credit reference bureau, where such information is reasonably required for the discharge of the functions of the digital credit provider or the licensed credit reference bureau. Section 14(3) A digital credit provider shall not submit negative credit information of a customer or any other person to a credit reference bureau where the outstanding amount relating to the credit information does not exceed one thousand shillings. Section 14(4) A digital credit provider submitting credit information to a bureau shall ensure that such information is timely, complete and accurate. Section 14(5) A digital credit provider who intends to furnish negative information to a bureau with respect to a customer shall, in writing or through electronic means, notify the customer of the intention to submit the negative information at least thirty days before submitting the negative information to the bureau or within such shorter period as the contract between the digital credit provider and the customer may provide: Provided that a shorter pre-listing notice shall not be less than seven days. Section 14(6) A digital credit provider who has furnished credit information to a bureau shall, within thirty days from the date the information was furnished to a bureau, notify the customer that the customer's credit information has been forwarded to the bureau. Section 14(7) No suit, prosecution or other legal proceedings shall lie against the Bank, credit reference bureau, a digital credit provider or chairperson, director, member, auditor, adviser, officer or other employee or agent of the Bank, credit reference bureau or digital credit provider for any loss or damage caused or is likely to be caused by anything which is done or intended to be done in good faith in pursuance of these Regulations, guidelines or directives issued hereunder, or under the Banking (Credit Reference Bureau) Regulations, 2020 (LN 55/2020).
15
CREDIT INFORMATION - 15. Restrictions on use of credit information

AI-assisted research summary: Digital credit providers must only use credit information from a bureau to make customer or employee-related decisions, must not release bureau information to third parties except as required by law or to an appointed agent for debt recovery, and must safeguard the security of such information.

Section 15. Restrictions on use of credit information Section 15(1) A digital credit provider shall not use credit information obtained from a bureau for any purpose other than for reaching decisions on transactions concerning a customer, and on matters concerning an employee or a potential employee of the digital credit provider or for any other purpose as may be authorized under these Regulations or any other written law. Section 15(2) A digital credit provider shall not release information obtained from a credit reference bureau to any third party except as may be required under these Regulations or any other relevant written law, or to a digital credit provider's appointed agent for the purpose of assisting the digital credit provider in the recovery of any of the digital credit provider’s debts. Section 15(3) A digital credit provider shall take measures to safeguard the security of information provided to it by a credit reference bureau, or by it to a credit reference bureau.

Part IX

REPORTING REQUIREMENTS AND OVERSIGHT BY THE CENTRAL BANK

33
REPORTING REQUIREMENTS AND OVERSIGHT BY THE CENTRAL BANK - 33. Reporting requirements, on-site and off-site monitoring

AI-assisted research summary: Digital credit providers must allow the Bank to inspect and monitor them, provide reports and make premises and records available; the Bank may require information and failure to comply may attract penalties.

Section 33. Reporting requirements, on-site and off-site monitoring Section 33(1) A digital credit provider shall be subject to the Bank’s on-site and off-site inspection, audit and monitoring and shall make such periodic reports and returns as may be specified by the Bank. Section 33(2) The Bank may require a digital credit provider to furnish it, at such time and in such manner as it may direct, with such information as the Bank may reasonably require for the proper discharge of its functions under these Regulations. Section 33(3) A digital credit provider shall make its premises, systems, books and records readily available to the Bank, or its officers or any person appointed by the Bank for inspection, audit and other supervisory purposes. Section 33(4) A digital credit provider who fails to comply with this Regulation shall be liable to assessment of penalties and other administrative sanctions as provided for in these Regulations.
34
REPORTING REQUIREMENTS AND OVERSIGHT BY THE CENTRAL BANK - 34. Disclosure of information

AI-assisted research summary: The Bank may disclose information it receives to domestic or foreign financial regulators, tax or fraud agencies when reasonably required for their functions; sharing with entities outside Kenya requires a reciprocal arrangement.

Section 34. Disclosure of information Section The Bank may disclose any information received in the course of the performance of its duties or responsibilities under the Act or these Regulations to any financial regulatory authority, fiscal or tax agency or fraud investigations agency within or outside Kenya, where such information is reasonably required for the proper discharge of the functions of the Bank or the requesting financial regulatory authority, fiscal or tax agency or fraud investigations agency: Provided that the sharing of information with institutions and entities outside Kenya shall only apply where there is a reciprocal arrangement.
35
REPORTING REQUIREMENTS AND OVERSIGHT BY THE CENTRAL BANK - 35. Powers of the Bank to advise and direct

AI-assisted research summary: The Bank may advise, recommend and direct digital credit providers (including directions to cease and desist); before issuing directions it may serve a notice to show cause; and digital credit providers must comply with any directions within the period specified and produce evidence if required.

Section 35. Powers of the Bank to advise and direct Section 35(1)(a) the business of a digital credit provider is being conducted in a manner contrary to the requirements of the Act, these Regulations or guidelines issued by the Bank or in any manner detrimental to or not in the best interests of its customers or members of the public; or Section 35(1)(b) give advice and make recommendations to the digital credit provider with regard to the conduct of its business generally; Section 35(1)(b)(i) give advice and make recommendations to the digital credit provider with regard to the conduct of its business generally; Section 35(1)(b)(ii) issue directions regarding measures to be taken to improve the management or business methods of the digital credit provider or to secure or improve compliance with the requirements of the Act, the Regulations or guidelines issued or any other written law or regulations; or Section 35(1)(b)(iii) in any case to which paragraph (b) applies, issue directions to the digital credit provider, officer or other person to cease and desist from such practice. Section 35(2) The Bank may, before issuing any directions under paragraph (1), serve upon the digital credit provider, officer or other person, a notice of such intent specifying the reasons therefore and requiring the digital credit provider, officer or other persons, within such period as may be specified in the notice, to show cause why such direction should not be issued. Section 35(3) A digital credit provider which receives any directions under the provisions of this regulation shall comply with the directions within such period as may be specified in the direction and, if so required, produce evidence of compliance. Section 35(4)(a) the standards to be adhered to by a digital credit provider in the conduct of its business; and Section 35(4)(b) guidelines to be adhered to by digital credit providers in order to maintain a stable and efficient financial system.

Part VI

DIGITAL CREDIT BUSINESS

16
DIGITAL CREDIT BUSINESS - 16. Provision of credit

AI-assisted research summary: Digital credit providers may extend loans to customers subject to their credit policy and any other requirements issued by the Bank, and may set in their credit policy parameters for borrower credit limits.

Section 16. Provision of credit Section 16(1) A digital credit provider may extend loans to its customers subject to its credit policy and any other requirements issued by the Bank, and clearly state the terms and conditions. Section 16(2) A digital credit provider may in its credit policy set parameters for determining borrower credit limits.
17
DIGITAL CREDIT BUSINESS - 17. Product approval

AI-assisted research summary: Digital credit providers may not introduce new products or change product features without the Bank’s prior written approval, and must notify customers of any feature variations at least thirty days before they take effect.

Section 17. Product approval Section 17(1) A digital credit provider shall not introduce a new digital credit product to the market or vary the features of an existing product without the Bank’s prior written approval. Section 17(2) A digital credit provider shall notify its customers of any variations in product features at least thirty days before the variations take effect.
18
DIGITAL CREDIT BUSINESS - 18. Credit appraisal

AI-assisted research summary: A digital credit provider must not advance credit to a customer until it has taken reasonable steps to assess the customer’s ability to repay.

Section 18. Credit appraisal Section A digital credit provider shall not advance credit to a customer before it has taken reasonable steps to assess the customer’s ability to repay the credit facility.
19
DIGITAL CREDIT BUSINESS - 19. Limit on interest recoverable from non-performing loans

AI-assisted research summary: A digital credit provider is limited to recovering only the maximum amount specified in paragraph (2) from a customer in respect of a non-performing loan.

Section 19. Limit on interest recoverable from non-performing loans Section 19(1) A digital credit provider shall be limited in what it may recover from a customer with respect to a non-performing loan to the maximum amount under paragraph (2). Section 19(2)(a) the principal owing when the loan becomes non-performing; Section 19(2)(b) interest in accordance with the contract between the customer and the digital credit provider, not exceeding the principal owing when the loan becomes non-performing; and Section 19(2)(c) reasonable expenses incurred in the recovery of any amounts owed by the customer. Section 19(3) If a loan becomes non-performing and then the customer resumes payments on the loan and then the loan becomes non-peforming again, the limitation under paragraph 2(a) and (b) shall be determined with respect to the time the loan last became non-peforming. Section 19(4) This Regulation shall not apply to limit any interest under a court order accruing after the order is made.
20
DIGITAL CREDIT BUSINESS - 20. Credit collection

AI-assisted research summary: Prohibits use of threat, violence or other means to harm a person, their reputation or property if they do not settle loans.

Section 20. Credit collection Section use of threat, violence or other means to harm the person, or his reputation or property if they do not settle their loans;

Part VII

CONSUMER PROTECTION

21
CONSUMER PROTECTION - 21. Transaction receipts

AI-assisted research summary: Digital credit providers must give customers receipts for transactions and, if requested, must provide a comprehensive statement of transactions.

Section 21. Transaction receipts Section 21(1) A digital credit provider shall generate and issue a receipt or any other acknowledgement of transactions carried out by or with a customer, through electronic means or any other acceptable medium. Section 21(2) A digital credit provider shall upon request by the customer generate and issue the customer with a comprehensive statement of transactions carried out by or with the customer.
22
CONSUMER PROTECTION - 22. Customer complaints resolution

AI-assisted research summary: Digital credit providers must set up and communicate a complaints redress mechanism, resolve complaints promptly (within thirty days if immediate resolution is not possible), keep records of complaints and outcomes, and face penalties for non-compliance.

Section 22. Customer complaints resolution Section 22(1) A digital credit provider shall establish a complaints redress mechanism, including a dedicated channel for communicating customer complaints, and ensure proper communication of this mechanism to its customers. Section 22(2) A customer complaint shall be resolved promptly, and where immediate resolution is not possible, within thirty days of a customer reporting a complaint to a digital credit provider. Section 22(3) A digital credit provider shall keep a record of all complaints lodged by customers and the outcome of their resolution. Section 22(4) A digital credit provider who fails to comply with this Regulation shall be liable to assessment of penalties and other administrative sanctions as provided for in these Regulations.
23
CONSUMER PROTECTION - 23. Business continuity

AI-assisted research summary: A digital credit provider must have systems and processes to minimize disruptions and ensure business continuity.

Section 23. Business continuity Section A digital credit provider shall put in place systems and processes for purposes of minimizing disruptions and ensuring business continuity.
24
CONSUMER PROTECTION - 24. Information systems

AI-assisted research summary: Digital credit providers must use secure, reliable systems that ensure information confidentiality, integrity and availability.

Section 24. Information systems Section A digital credit provider shall use systems that are secure and reliable, and which ensure information confidentiality, integrity and availability.
25
CONSUMER PROTECTION - 25. Customer information

AI-assisted research summary: Prepare and maintain a key information document that summarizes the product or service’s fundamental benefits, risks and terms.

Section 25. Customer information Section prepare and maintain key information document that informs the customer of the fundamental benefits, risks and terms of the product or service, in a summarized form;
26
CONSUMER PROTECTION - 26. Access and collection of customer information

AI-assisted research summary: Digital credit providers may only access and collect customer information reasonably required for credit appraisal, approval, disbursement and collection, and must offer customers an opt-out mechanism for marketing messages.

Section 26. Access and collection of customer information Section 26(1) A digital credit provider shall only access and collect such customer information as is reasonably required for a customer's credit appraisal, approval, disbursement and collection. Section 26(2) A digital credit provider shall provide the customer with an opportunity, feature or function for opting out of marketing messages by the digital credit provider.
27
Provision

AI-assisted research summary: Digital credit providers must give customers the loan terms and conditions before granting a loan, include specified loan details, present them clearly, provide copies on request, and may not change terms without at least 30 days' prior notice.

Section 27. Terms and conditions Section 27(1) A digital credit provider shall provide to the customer the terms and conditions constituting the loan agreement between a digital credit provider and a customer before granting the loan. Section 27(2)(a) the loan amount; Section 27(2)(b) the loan charges and the circumstances under which they may be imposed; Section 27(2)(c) interest rate to be charged and whether on reducing balance or not; Section 27(2)(d) all other charges applicable to the loan; Section 27(2)(e) the date on which the amount of credit and all interest, charges, fees or any other liabilities are due and payable, and how they may be calculated; Section 27(2)(f) total cost of credit which shall include the principal amount, interest, fees, charges and any other liabilities; Section 27(2)(g) the annual percentage rate of interest; and Section 27(2)(h) customer complaint handling channels and procedures. Section 27(3) The terms and conditions shall be presented to the customer in a clear, simple and easily accessible format and language. Section 27(4) A digital credit provider shall upon request provide the customer with a copy of the terms and conditions constituting the loan agreement. Section 27(5) A digital credit provider shall not change its terms and conditions or have a provision in the agreement with the customer that varies any provision of the terms and conditions without at least thirty days prior notification to the customer.
28
CONSUMER PROTECTION - 28. False advertisements

AI-assisted research summary: A digital credit provider must ensure advertisements it publishes or authorizes do not contain false, misleading or deceptive representations.

Section 28. False advertisements Section 28(1) A digital credit provider shall ensure that any advertisement that it publishes or authorizes to be published does not include any false, misleading or deceptive representation, or is otherwise misleading or deceptive. Section 28(2)(a) a representation that the credit facility has benefits or qualities that it does not in fact have; Section 28(2)(b) a representation that the digital credit provider has an approval, status, affiliation or connection that it does not in fact have; Section 28(2)(c) an inaccurate or incomplete representation as to the interest rate, costs or charges payable under a digital credit facility.
29
CONSUMER PROTECTION - 29. Variation of credit terms

AI-assisted research summary: Digital credit providers must not change pricing models or increase charges/limits without prior approval or required notice and customer acceptance.

Section 29. Variation of credit terms Section 29(1) A digital credit provider shall not change its pricing model or parameters without the prior written approval of the Bank. Section 29(2) A digital credit provider shall not increase charges or credit limits or have a provision in the agreement with the customer that varies the credit terms under regulation 27(1)(a) to (e) unless the digital credit provider has given at least thirty-days prior notice of the intended changes to the customer and the customer has accepted the changes. Section 29(3) The notification under paragraph (2) shall clearly disclose to the customer the changes in the credit terms and shall incorporate the disclosure requirements under regulation 27.

Part VIII

ANTI-MONEY LAUNDERING AND COMBATING THE FINANCING OF TERRORISM

30
ANTI-MONEY LAUNDERING AND COMBATING THE FINANCING OF TERRORISM - 30. Sources of funds

AI-assisted research summary: Digital credit providers must give the Bank evidence and the sources of funds invested or proposed for their digital credit business and must show those funds are not proceeds of crime.

Section 30. Sources of funds Section A digital credit provider shall provide to the Bank the evidence and sources of funds invested or proposed to be invested in the digital credit business and demonstrate that the funds are not proceeds of crime.
31
ANTI-MONEY LAUNDERING AND COMBATING THE FINANCING OF TERRORISM - 31. Customer identity

AI-assisted research summary: Digital credit providers must take reasonable measures to verify the identity of their customers.

Section 31. Customer identity Section A digital credit provider shall take reasonable measures to satisfy itself as to the identity of its customers while performing transactions with them.
32
ANTI-MONEY LAUNDERING AND COMBATING THE FINANCING OF TERRORISM - 32. Compliance with laws on anti-money laundering and combating the financing of terrorism

AI-assisted research summary: Digital credit providers must comply with the Proceeds of Crime and Anti-Money Laundering Act, 2009, the Prevention of Terrorism Act, 2012, and related Regulations and Guidelines; failure attracts assessment of penalties and other sanctions.

Section 32. Compliance with laws on anti-money laundering and combating the financing of terrorism Section 32(1) A digital credit provider shall comply with the Proceeds of Crime and Anti-Money Laundering Act, 2009, and the Prevention Terrorism Act, 2012 and the relevant Regulations and Guidelines issued thereunder; Section 32(2) A digital credit provider who fails to comply with the Proceeds of Crime and Anti-Money Laundering Act, 2009, and the Prevention of Terrorism Act, 2012, and the relevant Regulations and Guidelines issued thereunder shall be liable to assessment of penalties and other sanctions as provided for under these Regulations.

Part X

ENFORCEMENT

36
ENFORCEMENT - 36. Duty to comply

AI-assisted research summary: Digital credit providers and other relevant persons must comply with the Act, these Regulations, any Regulations or Guidelines under the Act relating to digital credit business, and must comply with any directive, order or condition given or imposed by the Bank.

Section 36. Duty to comply Section 36(1) Every digital credit provider or any other relevant person shall comply with the provisions of the Act, these Regulations, or any other Regulation or Guideline issued under the Act relating to digital credit business. Section 36(2) In addition to the requirements of the Act, these Regulations and any other regulations made under the Act, every digital credit provider or any other relevant person shall comply with every directive or order given by the Bank, and every condition imposed by the Bank. Section 36(3) Non-compliance with the requirements of paragraphs (1) and (2) shall constitute non-compliance with directions of the Bank and may attract enforcement action under these Regulations.
37
ENFORCEMENT - 37. Enforcement and administrative sanctions

AI-assisted research summary: Section lists enforcement measures including monetary penalties (up to five hundred thousand shillings), additional daily penalties (up to ten thousand shillings), suspension or disqualification of directors/officers/shareholders, more frequent inspections, an order to submit a remediation plan within forty-five days, suspension or revocation of licence, and other actions the Bank may consider appropriate.

Section 37. Enforcement and administrative sanctions Section 37(1)(a) monetary penalty on a digital credit provider in such amounts not exceeding five hundred thousand shillings; Section 37(1)(b) additional penalties not exceeding ten thousand shillings in each case for each day or part thereof during which the violation or non-compliance continues; Section 37(1)(c) suspension from office of the non-compliant digital credit provider’s director or officer; Section 37(1)(d) disqualify a significant shareholder, director or officer from holding any position or office in any licensed or financial institution in Kenya; Section 37(1)(e) undertake more frequent inspections of that digital credit provider; Section 37(1)(f) order the digital credit provider to submit to the Bank, within forty-five days, a plan to resolve all deficiencies to the satisfaction of the Bank; Section 37(1)(g) suspension or revocation of the licence; and Section 37(1)(h) any other action as the Bank may consider appropriate.
38
ENFORCEMENT - 38. When administrative action may be taken

AI-assisted research summary: Administrative action may be taken for violation or non-compliance with provisions relating to digital credit business.

Section 38. When administrative action may be taken Section violation of or non-compliance with any of the provisions of the Act relating to digital credit business;
39
ENFORCEMENT - 39. Factors to consider in determining an administrative sanction

AI-assisted research summary: Paragraph (1) lists factors to consider when determining an administrative sanction; paragraph (2) says those provisions "may be used as a guide" in determining the appropriate administrative sanction but do not obligate the Bank to impose a less severe sanction than is reasonable.

Section 39. Factors to consider in determining an administrative sanction Section 39(1)(a) whether the person to be sanctioned or penalized is a natural person or corporate body; Section 39(1)(b) the nature of the legal or regulatory requirement, direction, order or condition which has been violated or not complied with; Section 39(1)(c) the nature and severity of the violation; Section 39(1)(d) the impact of the violation on the digital credit provider, its customer or other person; Section 39(1)(e) the benefits that could be or may have been derived from the violation; Section 39(1)(f) the amount of financial loss or other losses suffered or likely to be suffered by the digital credit provider, customer or other person; Section 39(1)(g) the circumstances under which the violation occurred; Section 39(1)(h) the financial condition of the digital credit provider or any other person at fault including in terms of size, assets, capital, loan portfolio, annual turnover and any other relevant financial condition; Section 39(1)(i) the frequency of violation of the same law, other laws, direction, order or condition; Section 39(1)(j) general level of compliance with the law by the digital credit provider or any other person as demonstrated over a period of time; Section 39(1)(k) the public interest affected by the violation; Section 39(1)(l) the identity, rank, job description of the officer of the digital credit provider, or any other person involved; Section 39(1)(m) whether the violation has been rectified or remedied or can easily be rectified or remedied; and Section 39(1)(n) such other relevant factor as the Bank may consider. Section 39(2) The provisions of paragraph (1) may be used as a guide in determining the appropriate administrative sanction, but shall not obligate the Bank to impose a less severe administrative sanction or penalty than what is reasonable.
40
ENFORCEMENT - 40. Determination of sanctions on case-by-case basis

AI-assisted research summary: Administrative sanctions must be determined on a case-by-case basis; any difference in treatment of digital credit providers or others must be justified by the Bank.

Section 40. Determination of sanctions on case-by-case basis Section The determination of administrative sanctions shall be carried out on a case-by-case basis and different sanctions may be imposed for different violations or against different digital credit providers or any other person: Provided that any difference in the treatment of digital credit providers or any other person shall be justified by the Bank.
41
ENFORCEMENT - 41. Notice to Show Cause

AI-assisted research summary: If the Bank determines a digital credit provider or other person has violated the Act or related rules, the Bank must notify that provider or person of the violation and invite them to show cause why an administrative sanction should not be imposed.

Section 41. Notice to Show Cause Section 41(1) If the Bank determines that a digital credit provider or any other person has violated any provision of the Act, these Regulations, or any other regulations or guidelines issued under the Act, or has failed to comply with any direction given, or condition imposed by the Bank, the Bank shall notify the digital credit provider or the person of the violation and invite the digital credit provider or the person to show cause why an administrative sanction should not be assessed and imposed. Section 41(2)(a) describe in general terms the facts or circumstances that constitute the violation or non-compliance; Section 41(2)(b) state the legal or regulatory requirement which was violated or the direction, order or condition which was not complied with; Section 41(2)(c) describe the person or entity which may have been involved in the violation if such information is within the knowledge of the Bank; Section 41(2)(d) notify the digital credit provider or any other person of the intention of the Bank to assess and impose an administrative sanction; Section 41(2)(e) specify the proposed administrative sanction; Section 41(2)(f) state the period within which the Notice to Show Cause shall be responded to; which period shall not be less than fourteen days; and Section 41(2)(g) contain any other relevant information which the Bank may find necessary.
42
ENFORCEMENT - 42. Consideration of representations received

AI-assisted research summary: Consider whether an administrative sanction should be imposed against a digital credit provider or any other person.

Section 42. Consideration of representations received Section whether an administrative sanction should be imposed against a digital credit provider or any other person;
43
ENFORCEMENT - 43. Representation not made or is made out of time

AI-assisted research summary: If the Bank does not receive a representation within the specified period (or receives it late), the Bank may determine and impose an administrative sanction; the Bank may also, on request by a digital credit provider or other relevant person, extend the time to respond to the notice to show cause.

Section 43. Representation not made or is made out of time Section 43(1) Where the Bank has not received any representation from the digital credit provider or any other person within the specified period or where the representation is received after the specified period, the Bank may proceed to determine and impose the appropriate administrative sanction. Section 43(2) The Bank may upon request by a digital credit provider or any other relevant person extend the time within which the notice to show cause may be responded to.
44
ENFORCEMENT - 44. Notification on determination of administrative sanction

AI-assisted research summary: Notification on determination of administrative sanction: the violations for which the determination has been made.

Section 44. Notification on determination of administrative sanction Section the violations for which the determination has been made;
45
ENFORCEMENT - 45. Sanction not to affect other forms of sanctions

AI-assisted research summary: The Bank may impose additional sanctions even if one administrative sanction has already been imposed against a digital credit provider or other relevant person.

Section 45. Sanction not to affect other forms of sanctions Section The imposition of one administrative sanction against a digital credit provider or any other relevant person shall not bar the Bank from imposing any other or additional sanctions as is provided for under the Act, these Regulations or any other written law.
46
ENFORCEMENT - 46. Rectification of the violation

AI-assisted research summary: Requires desisting from any act or omission to end continued violations of the Act, these Regulations, other regulations or guidelines under the Act, or any direction, order or condition imposed by the Bank.

Section 46. Rectification of the violation Section to desist from any act or omission in order to end any continued violation of the Act, these Regulations, or any other regulations or guidelines issued under the Act, or any direction, order or condition imposed by the Bank; or
47
ENFORCEMENT - 47. Period within which rectification is to be made

AI-assisted research summary: When the Bank requires a digital credit provider or other relevant person to take remedial action for a violation, the Bank must specify the period for that remedial action; providers or relevant persons may also voluntarily rectify violations on their own.

Section 47. Period within which rectification is to be made Section Where the Bank requires a digital credit provider or any other relevant person to take a specific action to rectify or remedy a violation, the Bank shall specify the period within which the remedial action should be taken: Provided that a digital credit provider or any other relevant person may on their own motion, rectify or remedy any violation.

Part XI

REVIEW

48
REVIEW - 48. Review

AI-assisted research summary: A digital credit provider or any other relevant person aggrieved by a Bank decision may request the Bank to review the decision within fourteen days of notification.

Section 48. Review Section 48(1) A digital credit provider or any other relevant person aggrieved by the decision of the Bank under these Regulations, may within fourteen days from the date of notification of the Bank’s decision request the Bank to review the decision. Section 48(2) The request for review under this Regulation shall not suspend the effective date of the Bank’s decision, including the commencement of an administrative sanction or requirement for a digital credit provider or any other relevant person to pay a monetary penalty unless the digital credit provider or any other relevant person requests the Bank for such suspension pending the determination of the request for review and the Bank has suspended the commencement of its decision. Section 48(3) Any request for the suspension of the commencement of an administrative sanction shall be made before the effective date of the administrative sanction.
49
REVIEW - 49. Grounds for review

AI-assisted research summary: Grounds for review: the violation did not take place.

Section 49. Grounds for review Section the violation did not take place;
50
REVIEW - 50. Request for additional information

AI-assisted research summary: The Bank may ask the applicant to submit additional information to enable the Bank to determine a request for review.

Section 50. Request for additional information Section The Bank may request the applicant to submit such additional information as the Bank may require to enable it determine the request for review.
51
REVIEW - 51. Determination of the request for review

AI-assisted research summary: The Bank may consider and determine a request for review within thirty days of receipt, and must invite the digital credit provider or other relevant person for a meeting if so requested.

Section 51. Determination of the request for review Section 51(1) The Bank may within thirty days from the date of receipt of the request for review or any requested additional information, whichever is later, consider and determine the request for review. Section 51(2) The Bank shall if so requested by the digital credit provider or any other relevant person, invite the digital credit provider or any other relevant person for a meeting to hear representations on the request for review.
52
REVIEW - 52. Communication of decision

AI-assisted research summary: The Bank must inform in writing the digital credit provider or any other relevant person of its decision and must state the grounds for the decision.

Section 52. Communication of decision Section The Bank shall in writing inform the digital credit provider or any other relevant person of its decision and state the grounds for its decision.

Part XII

OTHER PROVISIONS

53
OTHER PROVISIONS - 53. Aggregation of monetary penalties

AI-assisted research summary: A digital credit provider or other relevant person who violates provisions may be penalized for each violation.

Section 53. Aggregation of monetary penalties Section A digital credit provider or any other relevant person who has violated several provisions of the Act, these Regulations, any other Regulation or Guideline issued under the Act or any direction, order or condition referred to in these Regulations may be penalized for each and every violation.
54
OTHER PROVISIONS - 54. Application of monetary penalty to each violation

AI-assisted research summary: When the Bank assesses monetary penalties for non-compliance, the monetary penalties prescribed apply to each and every violation and the penalty may be assessed for each single violation.

Section 54. Application of monetary penalty to each violation Section Where the Bank assesses monetary penalties for non-compliance, the monetary penalties prescribed in these Regulations apply to each and every violation and assessment of the penalty may be carried out for each and every single violation.
55
OTHER PROVISIONS - 55. Civil debt

AI-assisted research summary: Unpaid monetary penalties are civil debts and the Bank may recover them by lawful process.

Section 55. Civil debt Section Any unpaid monetary penalty shall constitute a civil debt and may be recovered by the Bank through any lawful process.
57
OTHER PROVISIONS - 57. Voluntary liquidation

AI-assisted research summary: A digital credit provider may voluntarily liquidate with the Bank's approval if solvent; the Bank may approve if satisfied of solvency; upon approval the provider must cease operations except for asset-preservation activities and the Bank must follow up to ensure orderly liquidation.

Section 57. Voluntary liquidation Section 57(1) A digital credit provider may, with the approval of the Bank, voluntarily liquidate itself if it is able to meet all its liabilities. Section 57(2) An application for the Bank’s approval for the purposes of paragraph (1) shall be in such form as may be prescribed. Section 57(3) The Bank may, upon receipt of an application under paragraph (2), approve the application if satisfied as to the solvency of the digital credit provider. Section 57(4) Where the Bank approves an application by a digital credit provider under this Regulation, such digital credit provider shall forthwith cease all its operations except such activities as are incidental to the orderly realization, conservation and preservation of its assets and settlement of its obligations. Section 57(5) The Bank shall upon approval of a voluntary liquidation, follow up with the digital credit provider to ensure smooth execution of the liquidation process.
59
OTHER PROVISIONS - 59. Transition

AI-assisted research summary: Persons already conducting unregulated digital credit business must apply to the Bank for a licence within six months of publication; applicants may continue operating while their application is pending subject to the Act, these Regulations and any Bank conditions.

Section 59. Transition Section 59(1) A person who, at the commencement of these Regulations, was conducting digital credit business which is not regulated under any other written law shall apply to the Bank for a licence within six months of publication of these Regulations. Section 59(2) An applicant under paragraph (1) may continue to conduct digital credit business pending determination of the application subject to the Act, these Regulations and any conditions issued by the Bank.

Provision text is displayed from LexChat’s stored statute record. Use the official source links to verify amendments, commencement, and current legal force.

About this LexChat collection

Publisher and coverage

LexChat is published by Esheria. Coverage reflects the legislation currently mapped from identified source collections; it may be incomplete, delayed, or later corrected. The official source controls where it differs from this research page.

AI and research method

AI-generated material is explicitly labelled and published only through LexChat's quality controls. It is a research aid, not the source document.

Corrections and reporting

Report a source mismatch, factual issue, personal-data concern, or licensing question to support@esheria.co.ke. Include this page's URL and the supporting official source so the record can be reviewed, corrected, restricted, or withdrawn.

Legal-information disclaimer

LexChat provides legal information and research tools, not legal advice. Verify currency, status, citations, and jurisdiction with authoritative sources and a qualified professional where appropriate.