The BGA Kenya team, led by Managing Director Dickson Omondi, wrote an update to clients on growth and regulatory developments in Kenya’s banking and financial sector.

Context 

  • Kenya’s banking sector is entering a new growth phase, underscoring both short- and long-term investment potential driven by rising profitability, ambitious regional expansion plans and acquisition interest from regional players. Banks and financial services companies dominate Kenya’s capital markets, while regional banking groups including South Africa-based Nedbank, Absa Group, Standard Bank Group and Nigeria’s Access Bank are seeking to increase their investments or acquire new stakes in the market.
  • Supported by growing intra-African trade and economic expansion across the region, Kenyan banks are also pursuing regional growth. Equity Bank, Kenya Commercial Bank and NCBA Group are among those that have expanded across East Africa and, in some cases, further afield into southern Africa. As the banking sector grows, the Central Bank of Kenya (CBK) has published higher core capital requirements to promote financial stability and sustainability.
  • Kenya has positioned itself as one of Africa’s leading financial and technology hubs. The growth of mobile money transfer services, led by Kenya’s major telecommunications companies, and their integration into formal banking platforms have deepened financial inclusion. New regulations on virtual assets and anticipated new artificial intelligence (AI) and data governance policies strategy are shaping the sector’s regulatory landscape.

Significance 

  • Future competitiveness, and that of companies seeking to invest in Kenya’s financial ecosystem, will depend on the ability to navigate Kenya and Africa’s broader operating environment, with changes anticipated in legal and regulatory frameworks that are evolving rapidly to match the pace of technological advancement.
  • The higher core capital requirements will likely lead to consolidation of some of the lower-tier banks, through mergers and acquisitions and create opportunities for strategic investors and companies to benefit from revenue in the banking sector. Companies investing in the banking and financial sector will need to closely monitor regulatory trends, including those targeting technological innovations, integration of virtual assets and tokenized systems and AI and data governance.

Implications 

  • Companies and banks will now have the opportunity for new product offerings targeting Kenyan businesses and consumers under the Virtual Asset Service Providers (VASP) Act of 2025. The law opens the door for legally recognized trade in stablecoins, cryptocurrencies and their integration into Kenya’s fintech and payment services ecosystem. While specific VASP regulations are still under development, companies operating in this sector should anticipate close oversight to ensure proper licensing and operations, safety and trust, consumer protection, compliance with data privacy laws and taxation.
  • Kenya’s wider financial sector and the banking industry’s strong inclination and adoption of technology mean that AI’s role in the sector will expand. Companies should expect that the government will continue on this trajectory and promulgate an AI law that, in concert with other laws, will determine legal enforcement and compliance on questions regarding transparency, safety and consumer protection.
  • As cross-border data flows intensify due to the growth in international transactions, regulatory authorities will closely scrutinize compliance with the country’s data protection laws. Companies will need to navigate and comply with data privacy requirements in Kenya and the active enforcement role of the Data Protection Commissioner.

We will continue to keep you updated on developments in Kenya. If you have any comments or questions, please contact BGA Kenya Managing Director Dickson Omondi at domondi@bowergroupasia.com.

Best regards, 

BGA Kenya Team

A small ginko leaf

Managing Director, Kenya

Dickson is a leading expert on the political economy, business and regulatory affairs of countries across Africa, with more than 25 years of experience in political party development, legislative strengthening, governmental accountability, public policy and civic engagement. He is a strategic leader and a firm believer in the continent’s economic and political potential, reinforced by his experience traveling and working in more than 16 countries in sub-Saharan Africa. Dickson works alongside multinational companies, governments and civil society to find mutually beneficial solutions for all stakeholders. His team’s strategic advocacy across a broad range of sectors helps organizations overcome challenges and ... Read More