The National Treasury has launched a major offensive against exploitative digital credit practices, rolling out stringent new regulations to protect Kenyan borrowers from financial abuse.
National Treasury and Economic Planning Cabinet Secretary John Mbadi told the Senate that the government is tightening the noose on “rogue lenders” through a comprehensive oversight framework led by the Central Bank of Kenya (CBK).
Responding to inquiries from Kisumu Senator Tom Ojienda, Mbadi revealed that the government now mandates all Non-Deposit Taking Credit Providers (NDTCPs) to secure licenses under a rigorous digital credit regulatory regime. This move aims to standardize governance, operational rules, and, most critically, consumer protection.
“These measures ensure compliance with the law and, most importantly, protect customers’ interests and prevent rogue lenders from violating consumer rights,” Mbadi told lawmakers.
Data Privacy and the End of Debt Shaming
A central pillar of the new enforcement strategy involves a partnership between the CBK and the Office of the Data Protection Commissioner (ODPC). To operate legally, digital lenders must now produce a certificate from the ODPC and implement “strong data protection policies.”
This requirement directly targets unethical debt collection methods, such as unauthorized data harvesting and the harassment of a borrower’s contacts, practices that previously plagued the sector. Mbadi noted that the licensing framework now forces transparency in how personal data is collected and stored, effectively curbing predatory interest rates and “debt-shaming” tactics.
A Snapshot of Kenya’s Credit Landscape
By December 2025, the government’s oversight spanned hundreds of financial institutions. Mbadi provided a breakdown of the current credit market, showing that while traditional banks still dominate, digital and microfinance sectors remain vital for millions:
| Lender Category | Number of Licensed Entities | Total Credit Extended (Ksh) | Market Share (%) |
| Commercial Banks | 38 | 4,369.6 Billion | 96.8% |
| Microfinance Banks | 14 | 32.7 Billion | 0.8% |
| NDTCPs (Digital Lenders) | 195 | 110.5 Billion | 2.4% |
Mbadi also pointed to a strategic reduction in the CBK benchmark rate, dropping from 13% in late 2024 to 11.25%, which spurred a 1.4% increase in total credit, easing the financial burden on households and businesses.
Addressing Regional Poverty and Social Safety Nets
Beyond financial regulation, the Treasury is tackling systemic poverty, which the 2022 Kenya Continuous Household Survey pegged at 39.8% nationally. Mbadi identified 13 counties, including Turkana, Mandera, and Marsabit, where poverty levels exceed 50%.
To bridge this gap, the government is refining how it distributes revenue. The allocation formula now heavily weights poverty levels, population, and land area to ensure vulnerable regions receive higher funding.
“We are improving beneficiary identification using national databases, including the Single Registry, to reduce duplication and ensure support reaches the most vulnerable,” Mbadi stated.
Digital Payments and Accountability
The government is also expanding digital payment systems for social transfers to enhance transparency. This modernization allows the Treasury to monitor fund distribution more effectively and provides a platform for citizens to report the misuse of funds or exclusion from support programs.
Mbadi concluded that by combining strict financial regulation with targeted social spending, the government intends to create a fairer economic environment that supports both growth and individual dignity.
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