KENYA Law and Practice Contributed by: Sammy Ndolo, Njeri Wagacha, Brian Muchiri and Sara Ndei, Cliffe Dekker Hofmeyr incorporating Kieti Law LLP
Digital Lending The Central Bank of Kenya (Digital Credit Provid - ers) Regulations, 2022 (DCP Regulations) pro - vide for the licensing and regulation of NDCPs. Payment Services The National Payments Systems Act, No 39 of 2011 (NPS Act), provides for the authorisa - tion and regulation of PSPs in Kenya, such as e-money issuers, electronic retail providers and cash merchants. The Central Bank of Kenya (Money Remittance Regulations) 2013 provide for the licensing and regulation of money remittance operators. Investment The Capital Markets Act, Cap 485A of the Laws of Kenyan, establishes the CMA and provides for the regulation of offers of securities in Kenya (whether publicly or privately). The Retirement Benefits Act, No 3 of 1997, establishes the Retirement Benefits Authority and the registration and regulation of retirement benefits schemes. Insurance The Insurance Act, Cap 487 of the Laws of Ken - ya, establishes the Insurance Regulatory Author - ity and provides for the regulation of insurance providers and insurance products, including digital insurance products. Consumer Protection The Competition Act, No 12 of 2010, focuses on ensuring a fair and competitive marketplace. It aims to protect consumers from businesses that engage in harmful practices like mislead - ing advertising or unfair pricing, and creates the Competition Authority of Kenya (CAK), which is
the agency responsible for upholding these fair competition standards. The Consumer Protection Act, No 40 of 2012, offers specific safeguards for individuals who use credit. It requires lenders to be transpar - ent with borrowers, providing clear information about loan terms. It also prevents lenders from penalising borrowers who choose to repay their loans ahead of schedule. The Data Protection Act, No 24 of 2019, pro - vides for the legal framework for the protection of personal data of individuals who use any fin - tech service, including financial data. It requires financial institutions to collect and safeguard customer data and implement technical and organisational measures to protect personal data. 2.3 Compensation Models Industry players apply different compensation for their services, as follows: • PSPs and market intermediaries typically impose a transaction fee for each action a customer takes on their platform, such as using a debit card or making an online pay - ment; • NDCPs focus on providing credit and charge a credit facility fee, which is usually deducted from the loan amount at the time of disburse- ment; and • banks are unique in that they often employ both fee structures – they may charge trans - action fees for transaction services, while also offering credit facilities with associated fees or interest rates. In addition, the various sector laws impose cer - tain conditions on how industry participants can
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