The Central Bank of Kenya (CBK) is reviewing the Central Bank of Kenya Act and the Banking Act in an effort to modernise oversight of digital finance and clarify its authority over fintech firms, as the sector continues to attract billions of dollars in investment.
The eight-month reform programme aims to identify gaps in existing legislation, align financial laws with the Constitution of Kenya and adapt the framework to a financial system increasingly driven by mobile payments, online lending and digital banking platforms.
Current banking laws were largely designed for traditional institutions, yet many fintech firms now operate across payments, credit, savings and investment products. The CBK is seeking clearer legal provisions defining how these companies are licensed, supervised and integrated into the broader financial system.
Daniel Mainda, Chief Executive Officer of the Nairobi International Financial Centre Authority, said regulatory certainty would be critical if Kenya is to maintain its leadership in financial innovation.
“What will determine whether we lead the continent is whether we intentionally create the right mix of regulatory certainty, strategic capital mobilisation, institutional clarity, and long-term policy consistency,” Mainda said at an industry meeting in Nairobi.
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Kenya is widely regarded as one of Africa’s most advanced digital finance markets and a top destination for venture capital funding. According to the Partech Africa Venture Capital Report, Kenya attracted more than US$1 billion in startup funding in 2025. In 2024, it secured about US$638 million, representing roughly 29 percent of Africa’s total startup investment that year. Analysts say fintech accounts for a significant share of that capital, driven by expansion in mobile money, digital credit and payments infrastructure.
Given the sector’s scale and economic weight, regulators argue that updating the legal framework is necessary to preserve financial stability while sustaining innovation. The CBK is benchmarking Kenya’s approach against international standards and global financial centres to maintain investor confidence and compatibility with global norms.
Among the options under discussion are clearer licensing categories for fintech firms, expanded supervisory powers over digital financial services, updated rules for digital banking activities, and stronger data protection and cybersecurity requirements. The reforms may also formalise how fintech companies interact with banks, payment systems and capital markets.
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Consumer protection and cyber resilience are central to the review. As more Kenyans access financial services through mobile platforms, authorities are seeking stronger tools to combat cybercrime, fraud and predatory lending. Strengthening safeguards is seen as essential to maintaining public trust in the financial system.
The reform process will involve consultations with financial institutions, fintech associations, legal experts and international regulatory bodies. A Regulatory Impact Assessment will evaluate how proposed changes could affect banks, startups, investors and consumers before legislative amendments are finalised. External consultants will also conduct a technical legal audit comparing Kenya’s framework with international best practices.
The initiative aligns with Kenya’s broader ambition to position Nairobi as a continental financial hub through the Nairobi International Financial Centre. Policymakers argue that a modern and predictable regulatory environment will enable startups to scale domestically rather than relocate abroad.
Mainda noted that Kenya has significant domestic capital to support innovation, with pension assets exceeding KES 1.8 trillion (about US$12 billion) and a growing insurance sector capable of channeling savings into new technologies and investment vehicles.
Once completed, the legislative review could reshape how fintech firms operate in Kenya, setting the tone for the next phase of growth in one of Africa’s most dynamic digital finance ecosystems.
