The Central Bank of Kenya (CBK) has lifted its decade-long freeze on licensing new commercial banks, effective July 1, 2025.

This change opens the door for Kenyan entrepreneurs to establish new banks, provided they meet the updated regulatory requirements.

The regulator said that the moratorium, which started on November 17, 2015, following the collapse of two banks in quick succession, will be lifted with effect from July 1, 2025.

“Significant strides have been made in strengthening the legal and regulatory framework for Kenya’s banking sector,” said CBK in a statement on Wednesday.

“Following the lifting of the moratorium, new entrants to the Kenyan banking sector will be required to demonstrate that they can meet the enhanced minimum capital requirements of Sh10 billion,” it added.

Key Steps to Establish a Bank in Kenya

1. Preliminary Engagement with CBK: Initiate contact with the CBK to discuss licensing requirements and related matters. ​centralbank.go.ke+1centralbank.go.ke+1

2. Name Approval: Seek CBK’s approval for the proposed bank name, especially if it includes terms like “bank” or “finance.” ​centralbank.go.ke+1centralbank.go.ke+1

3. Company Incorporation: Register the bank as a company limited by shares with the Registrar of Companies.​centralbank.go.ke

4. Capital Requirements: Ensure compliance with the enhanced minimum core capital requirements, which are set to reach Ksh10 billion by December 2029. ​Business Daily

5. Application Submission: Submit a comprehensive application to the CBK, including business plans, financial projections, and details of shareholders and directors. ​

6. CBK Review and Approval: The CBK will assess the application for compliance with regulatory standards and the applicant’s ability to operate a bank safely and soundly.

   
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Considerations for Prospective Bank Founders

• Financial Commitment: Be prepared to meet substantial capital requirements and demonstrate financial stability.​

• Regulatory Compliance: Adhere strictly to CBK regulations and guidelines throughout the application process.​centralbank.go.ke+9centralbank.go.ke+9centralbank.go.ke+9

• Strategic Planning: Develop a robust business model that addresses market needs and ensures sustainability.