Digital lenders remain the most complained-about players in Kenya’s financial sector, even after years of regulatory reform meant to clean up the industry. According to the Competition Authority of Kenya’s most recent annual report, complaints tied to digital lending accounted for the largest share of consumer cases filed with the authority, a trend that has persisted despite tighter oversight from the Central Bank of Kenya.
The CAK’s data shows the financial sector, driven largely by digital lenders, made up close to 30 percent of all consumer complaints filed in the period under review, up sharply from the year before. The regulator pointed to recurring issues such as predatory lending, poor disclosure of loan terms, and harassment of borrowers during debt collection, problems that were supposed to have been curbed by the CBK’s Digital Credit Providers Regulations introduced in 2022.
That framework was Kenya’s first serious attempt to bring order to a market that had ballooned to more than 400 lending apps operating with little to no oversight. The rules required digital lenders to get licensed, disclose loan costs upfront, and follow ethical debt recovery practices. Since then, CBK has steadily expanded the list of approved operators, and as of this month the regulator has licensed 252 digital credit providers, having received more than 800 applications since the licensing window opened in March 2022.
The scale of the industry helps explain why complaints keep piling up even as regulation tightens. Licensed digital lenders alone had issued more than 8.3 million loans worth over 150 billion shillings by the end of May this year, a sign of just how deeply mobile lending has embedded itself in everyday Kenyan life. For many borrowers, these apps remain the fastest, and sometimes only, route to quick cash, whether for school fees, medical bills, or covering a gap between paydays.
But the same speed and convenience that make digital loans popular have also made abuse easier to hide. Borrowers continue to report aggressive recovery tactics, including lenders contacting family members, friends, and employers to shame defaulters into paying. Data misuse remains another persistent complaint, with several lenders previously fined for mining users’ phone contacts and sending unsolicited or threatening messages to people who never took out a loan in the first place.
READ ALSO:SITA Procurement Failures Stall South Africa’s Digital Push
Lawmakers have tried to respond. The Business Laws Amendment Act, signed into law in December 2024 and effective from the start of last year, turned borrower harassment from a mere administrative infraction into a criminal offence, giving the CBK power to suspend licenses and publicly name violators. The Office of the Data Protection Commissioner has also stepped up enforcement, with authority to fine lenders who share borrowers’ personal data without consent.
Even so, gaps remain. Industry watchers note that unlicensed operators continue to rebrand and resurface under new names to dodge detection, while some licensed lenders still find ways around disclosure requirements. The CBK has acknowledged as much, and is currently reviewing proposals to extend its oversight to non-bank credit providers more broadly, closing loopholes that have allowed some lenders to escape scrutiny simply because their lending isn’t fully digital.
For consumers, the message from regulators has stayed consistent: check whether a lender is licensed before borrowing, read the terms carefully, and report harassment or data misuse to the CBK or the ODPC. Whether that advice translates into fewer complaints next year remains to be seen, but for now, digital lenders are still Kenya’s most reported financial headache.
