The Central Bank of Kenya (CBK) has officially lifted the moratorium on the licensing of new commercial banks, ending a nine-year freeze that began in 2015. The new directive takes effect on July 1, 2025, and is expected to inject fresh competition and innovation into Kenya’s vibrant banking sector.
The moratorium, imposed on November 17, 2015, followed the collapse of several small banks, prompting the regulator to tighten control over the industry. The move was aimed at stabilizing the sector, which was grappling with governance, risk management, and operational challenges.
“The moratorium was imposed to provide space for strengthening Kenya’s banking sector,” CBK said in a statement.
CBK attributed its decision to significant improvements in the legal, regulatory, and supervisory frameworks governing the banking industry. These developments have restored confidence in Kenya’s banking system, both at home and abroad.
The regulator cited a surge in mergers and acquisitions as evidence of renewed investor confidence and a healthier banking environment.
Currently, Kenya has 46 licensed financial institutions, including 39 commercial banks—24 of which are locally owned and 15 foreign-owned.
One of the key changes accompanying the lifting of the moratorium is the requirement for new banks to meet a minimum core capital of KSh10 billion, as outlined in the Business Laws (Amendment) Act of 2024.
“The enhanced minimum capital requirements will ensure that new entrants are well-capitalized and capable of navigating growing financial risks in regional and global markets,” CBK noted.
With the moratorium lifted, Kenya’s banking sector is expected to attract new local and international investors, further solidifying its status as a regional financial hub.
The CBK believes the introduction of stronger, better-capitalized banks will help finance large-scale infrastructure and development projects, accelerating the country’s economic growth agenda.
