CBK Governor Kamau Thugge/FILE
The Central Bank of Kenya (CBK) will lift the nearly decade-long moratorium on licensing new commercial banks, effective July 1, 2025.
The move marks a major shift in Kenya’s financial sector policy and paves the way for new players to enter one of East Africa’s most vibrant banking markets.
The moratorium, which has been in place since November 17, 2015, was imposed in response to a series of challenges that hit the banking sector at the time that saw several tier three lenders collapse.
“The moratorium was imposed against a backdrop of governance, risk management, and operational challenges in the banking sector. It was intended to provide space for the strengthening of the Kenyan banking sector,” said CBK in a statement.
“Since then, significant strides have been made in strengthening the legal and regulatory framework for Kenya’s banking sector.”
CBK noted that significant progress has been made, including improved supervision and greater transparency across the sector.
Furthermore, the last few years have seen a wave of consolidations, with several mergers and acquisitions reshaping the banking landscape.
The developments have attracted both domestic and international strategic investors, in what CBK says is a sign of renewed confidence in Kenya’s banking industry.
Currently Kenya has a total of 46 licensed institutions currently operating in the country, according to the latest CBK data. Of these, 39 are commercial banks. Privately owned, locally based banks number 24, while 15 banks are foreign-owned.
The Apex bank attributes the move to open up the space to the enactment of the Business Laws (Amendment) Act, 2024, which increased the minimum core capital requirement for commercial banks to Sh10 billion.
The CBK maintains that this enhanced capital threshold will be a key condition for any new applicant seeking to establish a bank in the country.
“New entrants to the Kenyan banking sector will be required to demonstrate that they can meet the enhanced minimum capital requirements of Sh10 billion,” the CBK stated.
The regulator says the decision to lift the moratorium aligns with Kenya’s broader economic development goals.
It argues that stronger and better-capitalized banks are expected to withstand growing financial risks across global, regional, and domestic markets. Moreover, they will be better positioned to fund large-scale projects essential to Kenya’s development ambitions.
