29th January 2026
After years of rapid expansion fueled by mobile money, Africa’s digital credit market is entering a regulatory phase. Governments across the continent are formalizing loan apps through licensing and conduct standards, aiming to curb abuses while maintaining access to credit.
Bonface Orucho, of Bird Story Agency, observes that regulators are reasserting control over a sector that has thrived on mobile money, thin oversight, and unmet demand for bank lending. What was once dominated by loosely governed apps is now being pulled into formal licensing regimes, as authorities balance financial inclusion with consumer protection.
This recalibration is unfolding against the backdrop of one of the world’s largest digital finance ecosystems. According to GSMA data, Africa had over 1.1 billion registered mobile money accounts in 2025—nearly three-quarters of global activity—with hundreds of millions of active users. Reuben Mwatosya, COO of Dar es Salaam-based digital finance company Tembo, describes the shift as moving “from permissive growth to rule-based supervision.”
Mobile money’s scale has made digital credit ubiquitous. Globally, over two billion mobile money accounts were registered by 2025, with Africa at the center. This infrastructure has enabled app-based lenders to reach borrowers at a speed and scale traditional banks never achieved.
Kenya as a Regulatory Test Case
Kenya illustrates regulators’ approach. By late 2025, the Central Bank of Kenya (CBK) had licensed 42 new digital credit providers, bringing the total to 195. Mandatory licensing began in 2022 following complaints about predatory pricing, opaque terms, and abusive debt collection.
Licensed firms met standards on capital adequacy, data protection, governance, and consumer disclosure. CBK data shows that these lenders had issued approximately 6.6 million loans worth KSh109.8 billion by November 2025. Industry estimates suggest over eight million Kenyans borrow digitally each month, demonstrating the sector’s systemic relevance.
Smartphone financing initiatives, such as Safaricom’s Lipa Mdogo Mdogo in Kenya and CRDB Bank-Vodacom programs in Tanzania, illustrate the integration of digital loans into daily life. By financing medical expenses, school fees, and small business working capital, these programs amplify both the social benefits and regulatory stakes of digital lending.
Regulatory Frameworks Across Africa
Kenya’s regulatory framework, the CBK (Digital Credit Providers) Regulations, 2022, requires all non-deposit-taking digital lenders to obtain authorization. The rules enable supervision of pricing, debt collection practices, and data protection. More than 800 firms applied for licenses after the regulations came into force, highlighting both market size and previous oversight gaps.
Nigeria, Africa’s largest economy, tightened oversight of online lenders in 2025. The Federal Competition and Consumer Protection Commission introduced mandatory registration and conduct rules on pricing transparency, data use, and loan recovery, signaling a shift from sporadic crackdowns to structured supervision.
Ghana took a similar path, requiring all digital credit providers to apply for authorization by November 2025. Licensing is risk-based, with requirements on capital adequacy, governance, and consumer protection frameworks, allowing innovation while protecting users. Uganda adopted an interim approach, introducing a code of conduct banning loan shaming, hidden fees, and aggressive recovery tactics as regulators prepare longer-term reforms.
The Bigger Picture
Africa’s digital lending boom was initially fueled by gaps in traditional banking, high mobile penetration, and permissive regulatory environments. According to World Bank Global Findex data, mobile account ownership has risen sharply, especially among women. As of 2024, 73% of women in low- and middle-income economies held a financial account, up seven percentage points since 2021.
As the market matures, consumer protection concerns are increasingly outweighing regulatory leniency. Digital credit can support micro-entrepreneurship and consumption smoothing but raises over-indebtedness risks when borrowers stack multiple loans.
Mwatosya notes that the current phase is distinguished by its institutional character. Regulators are building licensing systems, compliance obligations, and reporting frameworks, scrutinizing governance, capital, and consumer protection policies. By aligning digital lending with central banking, competition, and data protection regimes, responsible conduct is becoming a prerequisite for sustainable growth.