Kenya’s legislative landscape shifted significantly when the Business Laws (Amendment) Act, 2024 was formally enacted on 11th December 2024 and came into force on 27th December 2024. This legislation introduces far-reaching amendments to some of Kenya’s most critical business and financial statutes — changes that affect banks, microfinance institutions, credit providers, investors, and businesses operating in Special Economic Zones.
Whether you are a financial institution, a credit provider, an MSME, or a foreign investor, understanding these amendments is essential for maintaining legal compliance and avoiding regulatory penalties in Kenya.
Which Laws Have Been Amended?
The Act amends the following statutes:
- Banking Act (Cap. 488, Laws of Kenya)
- Central Bank of Kenya Act (Cap. 491, Laws of Kenya)
- Microfinance Act (Cap. 493C, Laws of Kenya)
- Special Economic Zones Act
Below is a detailed breakdown of the key changes and what they mean for your business.
1. Banking Act Amendments — Higher Capital Requirements for Banks in Kenya
Increased Core Capital Requirements
One of the most consequential changes under the Business Laws (Amendment) Act 2024 is the dramatic increase in core capital requirements for banks and mortgage finance companies operating in Kenya. The minimum core capital threshold has been raised from KES 250 million to KES 10 billion — a fortyfold increase designed to strengthen the resilience and stability of Kenya’s banking sector.
To allow financial institutions adequate time to comply, a phased transition plan running from 31st December 2024 to 31st December 2029 has been established. Banks and mortgage finance companies must develop and execute credible capital-raising strategies within this window or risk regulatory action by the Central Bank of Kenya.
What this means for you: Banks, mortgage lenders, and investors in the financial sector must urgently review their capital adequacy positions, restructuring plans, and shareholder agreements to align with the new requirements.
2. Central Bank of Kenya Act Amendments — Expanded Regulation of Credit Providers
Broader Scope of Regulated Entities
The amendment to the Central Bank of Kenya Act significantly expands the CBK’s regulatory reach. Previously focused on digital credit providers, the CBK’s oversight now extends to all non-deposit-taking credit providers in Kenya, including:
- Buy-Now-Pay-Later (BNPL) schemes
- Peer-to-peer (P2P) lending platforms
- Asset financing providers
This is a major regulatory development for Kenya’s fintech and alternative finance sector, bringing a wide range of previously unregulated credit services under formal CBK supervision.
Mandatory Licensing for Non-Deposit-Taking Credit Providers
Any business providing credit services in Kenya without accepting deposits is now legally required to obtain a licence from the Central Bank of Kenya. Licensed entities must align their operations — including credit pricing models and interest rate structures — with the CBK’s regulatory framework.
What this means for you: Fintech companies, BNPL platforms, P2P lenders, and asset financiers operating in Kenya must immediately assess their licensing status, review their credit pricing structures, and ensure full CBK compliance to avoid penalties or forced closure.
3. Microfinance Act Amendments — Stronger Consumer Protection and Clearer Licensing Rules
Revised Definition of Non-Deposit-Taking Microfinance Business
The Act clarifies the definition of a non-deposit-taking microfinance business in Kenya. Such businesses are now specifically defined as those providing credit secured by physical collateral — whether movable or immovable property — rather than cash-based security. This distinction has important implications for how microfinance institutions structure and secure their loan products.
New Registration and Licensing Requirements
A new provision, Section 4A of the Microfinance Act, sets out clear operational requirements for non-deposit-taking microfinance businesses. To operate legally in Kenya, such entities must be:
- Registered under the Companies Act, and
- Licensed under the Microfinance Act
Entities that are currently operating without the required registration or licence are now exposed to significant legal risk and must move to regularise their status without delay.
Robust Consumer Protection Measures
The amendments introduce strong consumer protection provisions for borrowers dealing with non-deposit-taking microfinance businesses. Specifically, these institutions are prohibited from engaging in harassment, abuse, intimidation, or oppressive practices during debt collection or loan recovery — whether directed at borrowers, guarantors, or any third parties.
What this means for you: Microfinance institutions must review their debt collection policies, staff training programmes, and borrower communication practices to ensure full compliance with these new consumer protection standards.
4. Special Economic Zones Act Amendments — New Investment Thresholds and Time-Limited Incentives
Minimum Investment Threshold for SEZs
Under the amended Special Economic Zones Act, the Cabinet Secretary now has the authority to set minimum investment thresholds for areas designated as Special Economic Zones in Kenya, based on recommendations from the Special Economic Zones Authority (SEZA). This gives the government greater flexibility to calibrate investment requirements for different zones and sectors.
10-Year Cap on SEZ Incentives
A significant change for SEZ investors is the introduction of a maximum 10-year limit on incentives granted to SEZ developers, operators, and enterprises — calculated from the date of licence issuance. Previously, certain incentives had no defined expiry period.
What this means for you: Businesses currently operating or planning to invest in Kenya’s Special Economic Zones must review their investment timelines, licence dates, and incentive packages to understand how the 10-year cap affects their long-term financial planning and return on investment projections.
Why These Amendments Matter for Business Compliance in Kenya
The Business Laws (Amendment) Act 2024 represents a broader government effort to:
- Strengthen Kenya’s financial regulatory framework
- Expand consumer protection across the credit and microfinance sector
- Attract quality foreign investment into Special Economic Zones
- Bring emerging financial services — particularly fintech — under formal regulatory oversight
For businesses, non-compliance with these amendments is not an option. The Central Bank of Kenya and other regulators have the tools to enforce these requirements, and the consequences of non-compliance range from financial penalties to licence revocation.
How Unicorn Registrars Can Help Your Business Navigate These Changes
At Unicorn Registrars, we specialise in helping businesses and financial institutions in Kenya stay ahead of regulatory change. Our team can support you with:
- Business Advisory Services — Practical guidance on how the Business Laws (Amendment) Act 2024 affects your specific business model, contracts, and operations.
- Licensing and Registration Support — Assisting credit providers and microfinance institutions in meeting CBK licensing requirements and Companies Act registration obligations.
- Contract Drafting and Review — Reviewing and updating commercial agreements, loan documentation, and credit pricing structures to reflect the new legal framework.
- Corporate Governance and Compliance Audits — Assessing your organisation’s readiness for the new regulatory environment and strengthening internal oversight mechanisms.
- SEZ Investment Advisory — Advising investors and developers on the implications of the new investment thresholds and the 10-year incentive cap for Special Economic Zones in Kenya.
Act Now — Compliance Deadlines Are Already Running
The Business Laws (Amendment) Act 2024 is already in force. The transition period for banking capital requirements runs until 31st December 2029, but planning must begin immediately. For licensing and consumer protection obligations, there is no grace period — compliance is required now.
Contact Unicorn Registrars today for a compliance review and expert advisory support tailored to your business.
Unicorn Registrars is a professional services firm in Nairobi, Kenya, offering business advisory, corporate governance, compliance, licensing support, and business registration services across Kenya.