• Central Bank reviewing core banking laws to clarify fintech and digital banking oversight

• Kenya remains one of Africa’s largest fintech investment destinations

• New legislation could strengthen licensing, cybersecurity and consumer protection

The Central Bank of Kenya (CBK) is reviewing the Central Bank of Kenya Act and the Banking Act as part of an eight-month reform programme aimed at modernising the legal framework governing financial services. The exercise seeks to identify gaps in existing legislation, align the laws with the Constitution of Kenya and adapt them to a financial system increasingly driven by digital platforms, online lenders and mobile payments.

At the core of the review is the CBK’s effort to establish clearer legal authority over fintech firms and digital financial services. Current banking legislation was largely designed for traditional institutions, yet many fintech companies now operate across payments, lending, savings and digital banking products. The regulator is seeking new provisions to define how these firms are licensed, supervised and integrated into the broader financial system.

Daniel Mainda, Chief Executive Officer of the Nairobi International Financial Centre Authority, said policy clarity will be critical if Kenya is to retain its leadership in financial innovation. Speaking at an industry meeting in Nairobi, he said sustained success depends on strong institutional foundations. “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,” he said.

The review reflects fintech’s growing economic weight in Kenya. The country is widely regarded as one of Africa’s most advanced digital finance markets and consistently ranks among the continent’s top destinations for technology investment. According to the Partech Africa Venture Capital Report, Kenya attracted more than $1 billion in startup funding in 2025. In 2024, it secured about $638 million, roughly 29% of Africa’s total funding, placing it ahead of several other major markets. Analysts say fintech accounts for a substantial share of that capital as mobile money, digital credit and payment infrastructure continue to expand.

Consumer protection and cyber resilience

Given that scale, regulators argue that modernising the legal framework is necessary to preserve financial stability while supporting innovation. The CBK is benchmarking Kenya’s approach against international standards and global financial centres to ensure compatibility with global norms and maintain investor confidence.

Options under discussion include clearer licensing categories for fintech firms, expanded supervisory powers over digital financial services, updated rules governing digital banking activities and stronger frameworks for data protection, cybersecurity and consumer protection. The reforms may also formalise how fintech companies interact with banks, payment systems and capital markets.

Consumer protection and cyber resilience are central to the review. As more Kenyans access financial services through mobile platforms, regulators are seeking stronger legal tools to address cyber threats, fraud risks and abusive lending practices. Strengthening these safeguards is viewed as essential to maintaining public trust in the financial system.

The process will involve consultations with financial institutions, legal experts, fintech associations and international regulatory bodies. The CBK has also planned a Regulatory Impact Assessment to evaluate how proposed changes could affect fintech firms, banks, investors and consumers before amendments are finalised.

A technical legal audit led by external consultants will review existing statutes and draft proposed amendments, comparing Kenya’s regulatory framework with international best practices to ensure continued competitiveness.

Beyond regulatory oversight, the reforms align with Kenya’s broader ambition to position Nairobi as a continental financial hub through the Nairobi International Financial Centre initiative. Policymakers argue that a clear, modern legal framework will allow startups and financial institutions to scale locally rather than relocate to foreign jurisdictions. Mainda noted that Kenya already has significant domestic capital to support innovation, with pension assets exceeding KES 1.8 trillion and a growing insurance sector capable of channelling savings into new financial technologies and investment vehicles.

Once completed, the review is expected to produce draft legislative amendments that could reshape how fintech companies operate in Kenya. For investors and startups, the outcome may define the next phase of growth in one of Africa’s most influential digital finance ecosystems.

By Cynthia Ebot Takang