CBK Introduces New Laws Targeting Small Lenders

The Central Bank of Kenya has invited members of the public to submit their views on the Draft CBK (Credit Guarantee Business) Regulations, 2025, which are set to transform how credit guarantee institutions work and introduce regulatory control over their operations.
In a notice issued on Thursday, the regulator noted thatfollowing the ammendment to the CBK Act through the Business Laws  (Amendment) Act, 2024, which introduced a framework to regulate and supervise credit guarantee businesses in the country, it will seek to stamp more authority on the operations of the credit lenders which have grown to be a critical sector o the economy.
Part of the regulations on which Kenya will be submitting their views will see under the new framework that all entities engaged in credit guarantee services are required to either register or obtain a license from the CBK.
Registered providers will now be required to meet minimum operational standards, while licensed entities will be subjected to more stringent requirements,similar to other financial institutions regulated by the bank.
Additionally, the regulations outline specific requirements on licensing, governance structures, risk management systems, and reporting obligations for guaranteeing businesses.
Entities currently undertaking credit guarantee business have been given five years to comply with the new regulations.
After the transition period, unregistered or unlicensed operators will be deemed non-compliant and could face regulatory penalties.
CBK has made the draft regulations accessible to the public through its official website and has also provided an online platform for the submission of feedback.
Members of the public have until Wednesday, October 15, 2025, to submit their comments.
According to CBK, the move is aimed at ensuring all credit guaranteeproviders operate within clearly defined legal and regulatory parameters.
“CBK notes that entities providing credit guarantee business play a pivotal role in ensuring that critical economic sectors in Kenya, such as the Micro, Small and Medium Enterprises (MSMEs), continue to access affordable credit sustainably,” CBK noted.
Separately, to consolidate the gains made in the financial inclusion journey in Kenya, CBK, in collaboration with public and private sector stakeholders, has announced that it is in the process of developing a National Financial Inclusion Strategy (NFIS 2025 2028).
The strategy seeks to coordinate financial inclusion initiatives in the country: address fragmentation in policies, initiatives, innovations, and programs targeting financial inclusion, and create synergy among stakeholders in advancing the financial inclusion agenda, among others.