CBK Digital Lending Rules Add AI Transparency Duties

In Short

Kenya’s Central Bank of Kenya (CBK) has introduced new rules that set specific obligations for non deposit taking credit providers that use artificial intelligence, AI, in credit decisions.

What Happened

Regulation 60 of the Central Bank of Kenya (Non-Deposit Taking Credit Providers) Regulations, 2026, covers the use of AI in lending.

It requires providers to make automated decisions explainable to customers, meaning customers should be able to understand why an automated system approved or declined a loan. It also requires providers to inform customers when AI is involved in an interaction.

The regulation sets expectations around human oversight, discriminatory bias, model accuracy, robustness, transparency and accountability. In practice, this gives the regulator a framework for examining how automated credit decisions are made and how providers take responsibility for them.

The regulations were gazetted on September 29, 2026, as Legal Notice No. 191 of 2026. They extend CBK oversight beyond digital credit providers to a wider category of non deposit taking credit providers, following amendments to the Central Bank of Kenya Act in 2024.

The regulatory framework also introduces higher licensing and annual fees. Application fees for licensed providers rise from KSh5,000 to KSh100,000, and annual fees increase from KSh20,000 to KSh500,000. Registered providers face an annual fee of KSh250,000, and the regulations provide for a KSh1 million penalty for late payment.

Why It Matters

The rules focus on automated decisions at a time when lenders use more than conventional credit histories to decide who qualifies for a loan.

Digital credit providers draw on transactional and communication data to develop credit scores. Mobile money histories can help lenders assess applicants who may have limited access to traditional forms of credit.

As this approach puts more weight on the data providers collect and the models they use to interpret it, CBK’s framework brings questions about borrower assessment, personal data use, and credit limit setting into Kenya’s regulatory framework.