NAIROBI, Kenya — The Central Bank of Kenya (CBK) has announced the lifting of the moratorium on the licensing of new commercial banks, set to take effect on July 1, 2025.
This move marks a significant shift in the country’s financial sector and is expected to open the doors for new players to enter one of East Africa’s most dynamic banking markets.
The moratorium, which has been in place since November 17, 2015, was initially introduced following a series of challenges in the banking sector, including the collapse of several tier-three lenders.
The move was part of efforts to stabilize and strengthen Kenya’s banking environment.
In a statement, CBK highlighted that the decision to lift the moratorium was made after considerable progress in strengthening the country’s banking infrastructure.
“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,” the statement read.
CBK pointed to improvements in the legal and regulatory framework governing the banking industry, including enhanced supervision and greater sector transparency, as reasons for lifting the ban.
These advancements have been critical in restoring confidence in the industry, both domestically and internationally.
The CBK noted that the recent surge in mergers and acquisitions within the sector reflects a renewed faith in Kenya’s banking system.
Currently, Kenya has 46 licensed financial institutions, with 39 of them being commercial banks.
Of these, 24 are privately owned and locally based, while 15 are foreign-owned.
The lifting of the moratorium is expected to allow more players, both domestic and international, to enter the market, further enhancing competition and innovation.
A key condition for any new bank wishing to enter the Kenyan market will be meeting the enhanced capital requirements established by the Business Laws (Amendment) Act of 2024.
Under this new legislation, the minimum core capital requirement for commercial banks has been increased to KSh10 billion.
The CBK has emphasized that this capital threshold will be essential for any applicant seeking to establish a bank in the country.
“The enhanced minimum capital requirements will ensure that new entrants are well-capitalized and capable of navigating the growing financial risks in both regional and global markets,” said the CBK.
The CBK’s move to lift the moratorium is aligned with Kenya’s broader economic development goals.
The regulator believes that stronger and better-capitalized banks will not only be more resilient but will also be better equipped to finance large-scale development projects that are critical to the country’s ambitions for economic growth.
The lifting of the moratorium is expected to further bolster Kenya’s position as a leading financial hub in the region and will likely attract more international investors to the country’s banking sector.
