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The Business Laws (Amendment) Act, 2024 (No. 20 of 2024), effective from 27 December 2024, significantly changes Kenya’s legal and regulatory landscape, especially for lending companies. Whether operating a fintech platform, launching a credit solution, or innovating in the special economic zones, these amendments will affect your compliance obligations, corporate structure, and operational practices.

We have unpacked the key updates and what they mean for your business.

1. Central Bank of Kenya Act

✅ Non-Deposit Taking Credit Providers (NDTCPs)

The term “digital lenders” has been replaced with non-deposit taking credit providers (NDTCPs), bringing online lending platforms, BNPL startups, peer-to-peer credit apps, and asset financiers under direct CBK regulation.

To operate legally:

• Your platform must be licensed by the Central Bank of Kenya.
• You must comply with credit marketing, pricing, and collection regulations.
• All loan terms must be disclosed on your digital interface.
• Borrowers must give explicit digital consent before any disbursement.

🔗 Central Bank of Kenya

CBK will oversee these platforms’ operations, enforcing a binding Code of Conduct. This gives borrowers legal protections—and places accountability on the startup.

✅ Credit Guarantee Business

A new legal framework has been introduced to regulate credit guarantee businesses, including fintechs that backstop loans or share in default risk.

Requirements include:

• Incorporating as a company limited by shares
• Registering and obtaining a CBK licence
• Complying with standards around governance, capital, and risk frameworks

Some exceptions exist for public or foreign-backed entities, but most startups must undergo licensing. Once licensed, you will receive a certificate and CBK oversight, creating responsibility and credibility in the market.

2. Microfinance Act

✅ Non-Deposit Taking Microfinance Businesses (ND-MFBs)

This amendment targets collateral-based lending by fintech. If you offer secured credit without accepting deposits, you are now classified as a non-deposit-taking microfinance business.

Legal obligations:

• You must incorporate a Kenyan company.
• You must obtain a licence under the Microfinance Act.
• Sole proprietorships and unregistered operations are no longer permitted.
• Existing ND-MFBs must comply within six months of the law’s commencement.

You must:

• Treat borrowers fairly and transparently.
• Inform borrowers of all costs, processes, and obligations before loan issuance.
• Comply with Data Protection laws and Article 31 of the Constitution.
• Avoid abusive, threatening, or unlawful collection practices.
• Charge only interest and fees that are agreed in writing.

This aligns fintech credit services with formal consumer protection obligations.

3. Special Economic Zones (SEZ) Act

Tech businesses operating in or eyeing Special Economic Zones (SEZs) should pay close attention:

✅ Key changes:

• BPO and IT-enabled services now fall squarely under SEZ definitions.
• A new SEZ Business Service Permit is required for entities in SEZs that do not qualify for tax incentives.
• The Cabinet Secretary may set minimum investment thresholds.
• All SEZ tax incentives are now capped at 10 years.

Startups operating from SEZs or planning to scale into one should immediately review compliance thresholds, apply for new permits, and align investment plans accordingly.

4. Standards Act

If your startup manufactures, imports, or sells physical products, including:

• Tech hardware
• Wearable devices
• Packaged goods or health products

You must now comply with enhanced obligations under the Standards Act.

✅ What’s required:

• Ensure your products meet Kenya Bureau of Standards (KEBS) requirements.
• Submit to sample testing and product traceability audits.
• Properly label all products, especially imports.
• Be aware: KEBS may access your registration data automatically, enabling proactive enforcement and online takedowns for non-compliance.

🔗 KEBS

Digital startups selling physical goods must treat standards compliance as core to business strategy, not an afterthought.

5. Kenya Industrial Research and Development Institute (KIRDI) Act

The KIRDI amendment is highly relevant for innovation-driven startups, especially those dealing in:

• Intellectual property
• Hardware devices
• Patentable software solutions

KIRDI is now empowered to support:

• Commercialisation of patents
• Licensing and tech transfer
• Access to R&D infrastructure

🔗 KIRDI

This opens new opportunities for early-stage startups developing protectable technologies to collaborate with government-backed institutions, vital for scaling and IP protection.

6. National Electronic Single Window System Act

If your startup imports tech components, servers, or hardware, this law affects your logistics:

• The National Electronic Single Window Agency may now charge digital processing fees for import/export documentation.
• Statutory dues can also be collected via the electronic platform.

While it streamlines cross-border trade, startups should plan for slightly higher transactional costs.

7. Business Registration Service Act

Startups registered as manufacturers will now have their data automatically shared with KEBS. This means:

• Early monitoring for standards compliance
• Possible inspections or enforcement actions shortly after registration

If your startup assembles or builds electronics, ensure regulatory alignment from day one.

8. Companies Act

Similarly, the Companies Act requires the Registrar to forward incorporation data of manufacturing companies to KEBS.

This reinforces a compliance-by-default framework. Founders should ensure:

• Corporate filings are accurate and aligned with operations
• Manufacturing processes meet KEBS and statutory standards

✅ Conclusion: How Digital Startups Can Stay Compliant in Kenya’s Evolving Legal Environment

The Business Laws (Amendment) Act, 2024, reflects Kenya’s commitment to a regulated, innovation-friendly digital economy. For fintech companies, SaaS ventures, lending platforms, and product-based tech startups, these laws are not optional—they’re foundational.

📩 Need tailored legal support for your digital or fintech startup in Kenya?

Contact MasiboLaw LLP for expert guidance on regulatory compliance, IP protection, and startup law:

Telephone: + (254) – 114 -529 – 457

Email: info@masibolaw.co.ke

Article by Meshack Masibo and Precious Simiyu