The Central Bankof Kenya Amendment Act 2021 - as Plain Text by MWakili


231 (Acts No.

15) REPUBLIC OF KENYA KENYA GAZETTE SUPPLEMENT ACTS, 2021 NAIROBI, 9th December, 2021 CONTENT A ct Page The Central Bank of Kenya (Amendment) Act, 2021 335 "kational council for law reporting 05 JAN 2022 i RO.


15 of 2021 Date of Assent: 7th December, 2021 Date of Commencement: 23rd December, 2021 AN ACT of Parliament to amend the Central Bank of Kenya Act and for connected purposes ENACTED by the Parliament of Kenya, as follows Short title.


This Act may be cited as the Central Bank of Kenya (Amendment) Act, 2021, Amendment of 2.

Section 2 of the Central Bank of Kenya Act section 2 of Cap (hereinafter referred to as the principal Act) is amended by 490.

inserting the following new definitions in the proper alphabetical sequence digital channel means the internet, mobile devices, computer devices, applications and any other digital systems as maybe prescribed by The Bank; digital credit means a credit facility or arrangement where money is lent or borrowed through a digital channel; digital credit business means the business of a digital providing credit facilities or loan services through channel; digital credit provider means a person licensed by The Bank to carry on digital credit business; specified digital credit provider means a licensed 33R; digital credit provider within the meaning of section Amendment of 3.

Section 4A of the principal Act is amended in section 4A of subsection (1) by inserting the following new paragraph Cap.


immediately after paragraph (d) (da) license and supervise digital credit providers not regulated under any other written law; I nsertion of new 4.

The principal Act is amended by inserting the Part in Cap.


following new Part immediately after Part VI B PART VI C^ REGULATION OF DIGITAL L ENDERS 336 2021 Central Bank of Kenya (Amendment) No.

15 Regulation of 33R.

Without prejudice to the digital lenders.

generality of section 4A (da), The Bank shall have power to (a) license digital credit providers; (b) approve digital channels through which digital credit business may be conducted; (c) determine parameters for pricing of digital credit; (d) supervise digital credit providers; (e) suspend or revoke a license; and (f) direct or require such changes as The Bank may consider necessary.


(1) A person shall not carry on Licensing.

any digital credit business unless that person has been licensed by The Bank under this Act or is permitted to do so under any other written law.

(2) An application for a license under subsection (1) shall be made to The Bank in such form and shall be accompanied by such information and fee as may be prescribed.

(3) An application under subsection (2) shall be accompanied by (a) a copy of the certificate of incorporation under the Companies Act; (b) a certified copy of the applicants memorandum and articles of association; (c) a notification of the companys registered address; (d) a certif icate i ssued pursuant to section 19 of the D ata Protection Act; (e) a statement as to compliance with the provisions of Part VII of the Consumer Protection Act; and 337 2021 Central Bank of Kenya (Amendment) No.

15 (f) such other documents as may be prescribed by the Bank.

(4) Without prej udice to subsection (3) (e), an applicant shall provide the terms and conditions applicable to the digital credit and which must be accepted by the borrower before activation of a mobile loan account.

(5) The Bank may grant or reject an application for a licence by written notice addressed to the applicant within sixty days from the date of receipt of an application.

(6) A licence granted under this section shall remain valid unless suspended or revoked by The Bank in accordance with this Act, but upon expiry of the prescribed period may be renewed.

(7) The Bank may suspend or revoke a licence by written notice to the holder of the l icence, if (a) the l icensee does not meet the conditions prescribed by The Bank; (b) the li censee isin breach of subsection (3) or the conditions of the Data Protection Act or the Consumer Protection Act; (c) the licensee is found to have given false i nformation during the application; (d) the licensee goes into liquidation or an order for winding up is issued; (e) the carries out activities outside the scope of the licensed activities; (f) the licensee is in breach of any of die provisions of this Act and the regulations made thereto relating to digital lending.

(8) Without prejudice to subsection (6), an applicant may apply for renewal of the licence at least three months before expiry of the licence.

338 2021 Central Bank of Kenya (Amendment) No.

15 (9) The Bank shall cause to be published in the Gazette and The Banks website - (a) before the thirtieth day of March in each year, the names and addresses of all licenced digital lenders under this section; (b) within thirty days of suspension or revocation of a license, the name and address of the digital lenders whose li cences have been suspended or revoked.

(10) A person who contravenes the provisions of this section commits an offence and shall be liable upon conviction to imprisonment for a term not exceeding three years or to a fine not exceeding five million shillings or to both.



The Bank shall consult with other regulators including but not limited to the (a) the Office of the Data Protection Commissioner; and (b) the Communications Authority.

Disclosure of credit 33 U.

Notwithstanding the provisions i nf orm ation.

of this section, a digital l ender shall disclose any positive or negative i nf orm ation of its customers tot he l icensed credit reference bureaus, where such information is reasonably required for the discharge of the functions of the digital lenders and the licensed credit reference bureaus.

Amendment of 5.

Section 43 of the principal Act is amended in section 43 of Cap.


subsection (1) by inserting the following words specified digital credit providers i mmediately after the words specified mortgage refinance companies.

Amendment of 6.

Section 57 of the principal Act is amended by section 57 of Cap.

af ter 490.

inserting the following new subsections immediately subsection (2) 339 2021 No.

15 Central Bank of Kenya (Amendment) (3) Without prejudice to the generality of subsection (1), The Bank may make Regulations as are necessary or expedient to give full effect to the provisions of this Act including (a) the licensing requirements for digital credit businesses; (b) permissible and prohibited activities; (c) anti-money laundering and measures for countering financing terrorism; (d) credit information sharing; (e) data protection; (f) consumer protection; (g) reporting requirements for digital credit providers; (h) offences and penalties; (i) dispute resolution mechanisms; and (j ) such other measures necessary for regulation of digital lending.

(4) Without prejudice to the generality of subsection (3Xh), The Bank may, in regulations, prescribe penalties comply to be paid by digital lenders who fail or refuse to made with the provisions of this Act and the regulations shall thereunder relating to digital credit, which penalties not exceed fi ve hundred thousand shillings, and may prescribe additional penalties, not exceeding ten thousand during shillings in each case for each day or part thereof which such failure or refusal continues.

I nsertion of new 7.

The principal Act is amended by inserting the section in Cap.


following new section immediately after section 58 Transitional clause.

59.(1) Any Regulations required to be made under this Act, to give effect to the provisions on digital lending, shall be made within three months of the coming into f orce of this A ct.

(2) Any person who before the coming into force of this Act was in digital credit business and is not regulated under any other law, shall apply for a licence in 340 2021 No.

15 Central Bank of Kenya (Amendment) accordance with section 33S, within six months of publication of the regulations under subsection (1).


Frequently asked questions

What is M-Wakili?

M-Wakili (Wakili AI) is an advanced AI-driven legal aide proficient in interpreting Kenyan law.
This tool is useful for lawyers, law students, and the public, providing exhaustive and concise solutions to legal issues.
M-Wakili is more than an information database, it dissects and analyzes legal documents, clarifying their essence and implications to answer queries accurately. Alongside its legal expertise, M-Wakili also produces persuasive written content.
The primary aim of M-Wakili is to provide world-class legal support to people from all walks of life, while also aiding the advancement of law professionals by enhancing research efficiency.
This innovative platform promises to revolutionize the legal field, enhancing the accessibility and effectiveness of legal expertise.

Will I get immediate answers to my legal questions 24/7?

Yes the service is available 24/7 and you will get answers to your legal questions within seconds.

How does M-Wakili work?

M-Wakili is a custom trained AI model that uses algorithms and machine learning to understand and answer a user's questions. It bases its responses on the existing Kenyan laws and regulations.

Is M-Wakili accurate?

Yes, M-Wakili is designed to provide accurate and reliable responses based on Kenyan Law and is considered more accurate than almost all AI models including ChatGPT. Additionally, it is constantly being updated and improved to ensure it is aware of the occurring changes in the laws and regulations.
If you find any model that is more accurate than M-Wakili, please let us know and we might give you a free subscription or a *refund. (We reserve the right to determine the accuracy of the model and if you should be given a refund or free subscription. Our terms and conditions apply.)

Who can use M-Wakili?

Everyone can use M-Wakili. Lawyers and law students can use it as a legal research tool, and the general public can use it to get answers to their legal queries.

How can I access M-Wakili?

You can access M-Wakili through our website. Just type in your question, and M-Wakili will provide the answers.

Is M-Wakili a substitute for a human lawyer?

No it cannot and will not be, M-Wakili is designed to assist and provide legal information and is great at that. However, there are still situations where the expertise and personal touch of a real lawyer is necessary, such as in court representation and negotiations.
Fun fact, most of our paying users are lawyers! They use M-Wakili to help them with legal research and analysis.

Is AI going to replace lawyers?

No. M-Wakili AI is great for helping real-life lawyers with legal work and assisting people in understanding legal problems, providing many ways how to handle them. However, AI cannot replace the human touch of a real lawyer. There are still situations where the expertise and personal touch of a real lawyer is necessary, such as in court representation and negotiations.
In fact, most of our paying users are lawyers! They are excited about the possibilities of AI in the legal industry and are leveraging it to save time and energy and focus on higher-level tasks.
AI can make the legal market more convenient for both sides by allowing real lawyers to focus on specialized services while using AI to handle certain tasks.

Is my data secure with M-Wakili?

Yes, we prioritize user data privacy and have implemented strict measures to ensure that your data is secure.

Can M-Wakili represent me in court?

Not yet, M-Wakili cannot represent you in court. It can help you understand the law and your legal situation, but you will need a human lawyer for court representation.

Do I need to pay for M-Wakili services?

Currently, we offer basic features for free while premium services require a subscription fee. Please visit our pricing page for more details.

How can M-Wakili help law students?

M-Wakili can assist law students in learning and practicing their legal research and analysis skills. It may also offer insights into current legal trends and issues, helping prepare them for their future in law.

What does "HHH" mean?

Helpful, Honest, and Harmless (HHH) are three components of building AI systems (like M-Wakili) that are aligned with people’s interests.
- Helpful: M-Wakili wants to genuinely help the user
- Honest: M-Wakili shares information it believes to be true, and avoids made-up information
- Harmless: M-Wakili will not cooperate in aiding the user in harmful activities or lead the user to harms way