Fintech 2026

KENYA Law and Practice Contributed by: Sammy Ndolo, Njeri Wagacha, Brian Muchiri and Valere Nyaboke, Cliffe Dekker Hofmeyr

Investment The Capital Markets Act, Cap 485A establishes the Capital Markets Authority (CMA) and regulates the offering of securities in Kenya, whether public or pri - vate. The Retirement Benefits Act, Cap 197 establishes the Retirement Benefits Authority and governs the regis - tration and regulation of retirement benefits schemes. Insurance The Insurance Act, Cap 487 establishes the Insurance Regulatory Authority and provides for the regulation of insurance providers and insurance products, including digital insurance products. Consumer Protection The Competition Act, Cap 504 ensures a fair and competitive marketplace. It protects consumers from harmful business practices such as misleading adver - tising or unfair pricing and establishes the Competi - tion Authority of Kenya (CAK) to enforce fair competi - tion standards. The Consumer Protection Act, Cap 501 offers target - ed safeguards for individuals using credit. It requires lenders to disclose loan terms clearly and prohibits penalties for early repayment. The Data Protection Act, Cap 411C provides the legal framework for protecting personal data, includ - ing financial data processed by fintech providers. It requires institutions to collect and safeguard customer data responsibly and implement technical and organi - sational security measures. 2.3 Compensation Models Industry Compensation Practices Industry players apply different compensation models for their services. • PSPs and market intermediaries generally charge a transaction fee for each action a customer per - forms on their platform, such as using a debit card or initiating an online payment. • NDCPs primarily focus on offering credit and typically charge a credit facility fee, which is often deducted from the loan amount at disbursement.

• Banks employ a hybrid model. They may charge transaction fees for transactional services while also providing credit facilities that attract fees or interest. Additionally, the various sectoral laws impose specific requirements on how industry participants may charge customers and what disclosures must be provided. Digital Banking Banks providing credit facilities are prohibited from imposing default charges or prepayment penalties. For non‑performing loans, interest on the overdue amount ceases to accrue once the accumulated inter - est equals the principal amount. Banks must disclose to customers all charges, fees, and penalties associated with a product or service before the customer selects it. They must also notify consumers of any changes to fees or charges within a reasonable time – typically 30 days – before imple - menting such changes. Digital Credit NDCPs must disclose to customers all payments required in connection with a loan, including interest, fees, expenses, and any other costs. They may not increase charges or credit limits without providing at least 30 days’ prior notice. NDCPs must also submit their pricing models to the CBK for approval. Once approved, they cannot alter their pricing models or parameters without the CBK’s prior written consent. They are further subject to simi - lar restrictions as banks regarding default charges, prepayment penalties, and interest on non‑performing loans. Payment Services PSPs are required to disclose all service charges and must publish and display this information prominently at all points of service. They must also notify both customers and the CBK of any material changes in rates, terms, or charges at least seven days before the changes take effect.

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