Kenya tells credit providers to explain AI decisions as licence fees jump

Kenya tells credit providers to explain AI decisions as licence fees jump

7 November 2026: Kenya's new credit provider regulations require lenders to make automated decisions explainable to customers and to say when AI is involved, according to a local report of Regulation 60. The same rules are reported to raise licensing fees twentyfold or more, a direct cost for anyone in the country's lending market.

Not yet independently verified. Kenya Law's index confirms the title, number and date, but we could not open the regulations themselves or a Central Bank page. Regulation 60's content and the fees come from one report in TechTrends KE, and we have no commencement date. We will update this when it can be confirmed, and remove this note.

Regulation 60 on AI in lending

The Central Bank of Kenya (Non-Deposit Taking Credit Providers) Regulations, 2026 were gazetted on 29 September as Legal Notice No. 191 of 2026. TechTrends KE reports that Regulation 60 addresses AI directly. A provider must make an automated decision explainable to the customer and tell customers when AI is part of an interaction.

The regulation also sets expectations on human oversight, discriminatory bias, model accuracy, robustness, transparency and accountability. That gives the Central Bank grounds to examine how a credit model reaches its answers and who answers for it.

This matters to more than the lenders themselves. Digital lenders score applicants on transactional and communication data, including mobile money histories, so a scoring vendor selling into Kenya may be asked for documentation its customer now has to produce.

Fees and who now falls under the Central Bank

The rules take Central Bank oversight past digital credit providers to the wider group of non-deposit-taking credit providers, following 2024 amendments to the Central Bank of Kenya Act. A business that was outside the digital licence should check whether it is now caught.

The reported fee changes:

• Application fee for licensed providers: KSh5,000 to KSh100,000
• Annual fee for licensed providers: KSh20,000 to KSh500,000
• Annual fee for registered providers: KSh250,000
• Late payment penalty: KSh1 million

A loan book up about 40% in six months

The Central Bank's own reported figures show why it is paying attention. Outstanding gross loans at digital credit providers rose from KSh110.1 billion in December 2025 to KSh153.8 billion in June 2026, and loan accounts rose from 6.74 million to 8.9 million. It had licensed 281 digital credit providers by September 2026.

It says most digital loans stay below KSh20,000 and run from one week to two months, and that recovering some of them can cost more than the amount lent. Licensing of digital lenders began in 2022 after concerns about high interest rates and aggressive collection, including the public shaming of borrowers.

A proposal on credit limits is still open

Separately from the gazetted rules, the Central Bank has proposed that lenders stop raising customers' limits automatically and carry out a fresh assessment before any review. That would touch the limit logic in lending platforms, but it remains a proposal.

Our loan origination software category lists nine products. Lenders using any of them for Kenyan customers should ask how a declined applicant would receive an explanation.

Sources

• Kenya Law: index entry for Legal Notice 191 of 2026, dated 29 September 2026 (read 7 November 2026), 7 November 2026
• TechTrends KE: digital lending regulations in Kenya, 7 November 2026, 7 November 2026