Kenya’s digital lending market nearly doubled in 2025, with outstanding loans rising to Ksh110.1 billion as more borrowers turned to mobile-based credit and regulators licensed more than 100 new digital lenders.
The latest Central Bank of Kenya Bank Supervision Annual Report shows that gross outstanding loans issued by licensed Digital Credit Providers (DCPs) jumped by 99.6 percent from Ksh55.2 billion in December 2024 to Ksh110.1 billion in December 2025.
During the same period, the number of licensed digital lenders surged from 85 to 195.
CBK licensed 110 new digital lenders during the year: 41 in June, 27 in September, and 42 in December.
The regulator said changing customer preferences and growing demand for quick, convenient access to credit through digital channels drove the rapid expansion.
The digital lending sector continued its rapid expansion as more Kenyans turned to mobile applications and USSD platforms for quick access to credit.
Licensed providers offer products ranging from personal and emergency loans to agricultural financing, business loans, development credit, and asset financing.
Digital Credit Boom
The growth in lending was matched by a sharp increase in the number of loan accounts.
According to the report, the average number of digital loan accounts rose by 71 percent from 3.96 million in December 2024 to 6.74 million in December 2025.
The average loan size remained largely unchanged during the period
CBK said the growth in outstanding credit was linked to increased adoption of digital lending channels and the sharp rise in the number of licensed providers operating in the market.
The rapid growth of digital lending has prompted increased regulatory oversight.
CBK said it has continued to strengthen supervision of Digital Credit Providers, focusing on consumer protection, responsible lending, pricing transparency, data governance, and market stability.
Cybersecurity Risks Mount as CBK Reviews Banking Sector Rules
All commercial banks surveyed by the Central Bank of Kenya reported having cybersecurity frameworks, cybersecurity policies and formal business continuity management processes in place, according to the regulator’s 2025 banking supervision report.
The survey found that 95 percent of banks assess and manage cybersecurity risks posed by third-party vendors, while 97 percent conduct regular audits of cybersecurity controls.
The report shows that 100 percent of surveyed banks have processes for reporting cybersecurity incidents and must notify CBK within 24 hours of any cyberattack or breach that could significantly affect operations, customers, reputation, or financial condition.
All respondents also reported providing regular cybersecurity awareness training for employees.
Banks identified artificial intelligence risks, rising cybersecurity costs, evolving cyber threats and a shortage of cybersecurity professionals among the biggest challenges facing the sector. Institutions also cited reliance on manual monitoring systems and the high cost of specialised cyber tools and technical training.
The report notes that cybersecurity threats facing the financial sector continue to grow in frequency and complexity, including phishing attacks, ransomware and distributed denial-of-service attacks.
As a result, CBK said it has begun updating its 2017 Cybersecurity Guidance to incorporate emerging risks linked to artificial intelligence, cloud computing, application programming interfaces, mobile money fraud and data protection.
Banks Post KSh306 Billion Profit as Loans Book Grows by KSh277 Billion
Kenya’s banking sector posted a profit before tax of KSh306.3 billion in 2025, up from KSh260.3 billion the previous year.
The increase of Ksh46 billion represented a 17.7 percent growth in profitability.
The report shows the increase was driven by a larger decline in expenses than income.
Total banking sector expenses fell by Ksh67.4 billion, while total income declined by Ksh21.5 billion during the year.
Interest expenses recorded the biggest reduction, falling by Ksh96.9 billion from KSh385.8 billion in 2024 to KSh288.9 billion in 2025.
Interest expenses accounted for 39.8 percent of total sector expenses, down from 48.6 percent a year earlier.
Total income declined from Ksh1.054 trillion to Ksh1.033 trillion.
Interest earned on loans and advances fell from Ksh540.9 billion to Ksh500.4 billion, while income from government securities increased from Ksh262.3 billion to Ksh287.2 billion.
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