The New Business Laws (Amendment) Act, 2024
On 27th December, 2024 the Business Laws ( Amendment) Act 2024 (No. 20 of 2024), became effective. The Act introduces critical changes to the banking and financial sectors.
Key amendments:
- Banking Act
The Act updates penalties for non-compliance of the Banking Act by financial institutions, credit reference bureaus and other person of up to twenty million shillings or three times the gross amount of the monetary gain made, or loss avoided by the failure or refusal to comply.
The core minimum capital required for banks and mortgage finance companies is now ten billion Kenya shillings phased in over six years. This measure is expected to strengthen financial stability but may also accelerate consolidation in the banking sector.
- Central Bank Act
“Digital lenders “ are now referred to as “ non-deposit taking credit providers” and will include buy now pay later (BNPL), peer-to-peer lending, asset financiers, pay-as-you-go credit apps and lending platforms.
These credit providers are now under the Central Bank of Kenya Regulation and must register and obtain a license from CBK. The Act provides a six month transition window for persons undertaking non-deposit-taking microfinance businesses to comply with the new provisions.
- Credit Guarantee Business
Credit guarantee providers have to be registered and licensed by the CBK. The Act defines “credit guarantee business” as a business of providing a guarantee to a lender through absorption of all or a portion of the lender’s risk on a credit facility made to a borrower in case of default.
According to the Act a credit guarantee businesses must be a company limited by shares incorporated under Companies Act and licensed by the CBK. The exceptions to these the licensing requirement are foreign credit guarantee providers who are owned by foreign governments which have entered into agreements with the Government of Kenya, a foreign credit guarantee providers who partner with local financial institutions to provide credit guarantee services and a bank providing credit guarantee as part of its regular business.
The timelines for registration and licensing of credit guarantee providers is within five years.
- Microfinance Act
The Act provides for the licensing requirement for non-deposit-taking microfinance business(NDTMBs);
- It has to be a Kenyan company
- You have to obtain a license under the Microfinance Act.
- Comply with Data Protection Act and Article 31 of the Constitution of Kenya .
- Interests and fees should be in written agreements.
Existing NDTMBs must register within six months of the Act’s commencement.
🧭 What This Means for Your Business
The Business Laws (Amendment) Act, 2024 signals a decisive shift toward formalization and accountability in Kenya’s financial landscape. If you are involved in:
- Banking
- Digital lending or BNPL schemes
- Fintech and credit platforms
- Microfinance
- Credit guarantee services
... this law directly affects your compliance, licensing, and operational frameworks.
📌 How Judsons Can Help
At Judsons Advocates LLP, we guide businesses through:
- Licensing and registration under the new CBK and Microfinance frameworks
- Compliance with consumer protection and data regulations
- Structuring and documenting compliant financial products
- Legal audits, risk assessments, and regulatory filings
Contact us today to ensure you stay ahead of compliance obligations and regulatory shifts in Kenya’s evolving financial sector.
Disclaimer: This article is for general informational purposes only and does not constitute legal advice. For specific guidance, please consult with our regulatory and financial law experts.
