Kenya Digital Lenders Lead Consumer Complaints Despite Reforms

In Short

• Kenya digital lenders are now the biggest source of consumer complaints in financial services.
• Complaints rose to 355 in the year to June 2025, up from 67 a year earlier.
• Regulators say common issues include misleading ads, undisclosed charges, and lenders changing loan terms.

What Happened

Kenya digital lenders are topping the country’s consumer complaint list, even after new rules brought the sector under closer supervision.

The Competition Authority of Kenya said complaints against app-based lenders climbed to 355 in the year to June 2025. That is up from 67 in the previous year. The authority said digital lenders made up nearly two-thirds of all complaints in financial services.

The complaints were mainly about misleading representations, hidden fees, and unilateral changes to loan terms. Unilateral changes means the lender updates the terms without the borrower agreeing again.

Kenya changed its laws in 2022 to put digital credit providers under the Central Bank of Kenya’s supervision. CBK supervision means lenders can be licensed and monitored, similar to how banks are overseen. The aim was to reduce abusive debt collection and improve transparency on pricing.

Why It Matters

Digital lending apps have expanded access to short-term credit for many Kenyans. But a sharp jump in complaints suggests market conduct is still weak, even with tighter regulation.

For founders and operators in the lending space, this is a reminder that compliance is not only about licensing. It also includes clear pricing, fair marketing, and stable loan terms.

For investors, the data points to regulatory and reputational risk in consumer credit. Companies that can prove transparent fees, reliable disclosures, and strong customer support may be better positioned as enforcement increases.

For customers, the complaint trends highlight what to watch for before borrowing, including total repayment cost, extra charges, and whether terms can change mid-loan. For safer alternatives, some borrowers may prefer mobile money-linked credit products such as KCB M-PESA, where pricing and dispute channels may be more formalised.