The Kenya Bankers Association (KBA) has asked Parliament to amend proposed competition and microfinance legislation, warning that some provisions could create regulatory uncertainty, impose excessive penalties and undermine financial inclusion.
In submissions to the National Assembly’s Departmental Committee on Finance and National Planning, KBA supported the objectives of the Competition (Amendment) Bill, 2026, and the Microfinance Bill, 2026. However, it called for safeguards to prevent overlapping oversight, unintended market disruptions and additional challenges for financial institutions.
On the Competition (Amendment) Bill, 2026, the association raised concerns about proposed provisions introducing concepts such as “strategic market position” and “superior bargaining position” when determining market dominance.
KBA argued that the widespread use of digital financial services should not, on its own, be treated as evidence that an institution holds a dominant market position.
“Financial services products such as mobile savings, digital credit, wallet-linked banking and merchant-payment solutions may become widely used because they are convenient, trusted, accessible and responsive to consumer needs. Their scale, data use or partnership structure should not, on its own, trigger a finding of strategic market position,” KBA submitted.
The bankers urged legislators to require the Competition Authority of Kenya (CAK) to prove “substantial and durable market influence” before classifying an institution as holding a strategic market position.
They also called for clear exemptions for activities undertaken to comply with mandatory requirements, including anti-money laundering and counter-financing of terrorism rules, data protection obligations, cybersecurity requirements and prudential guidelines.
KBA further opposed proposed administrative fines of up to 10 per cent of an entity’s gross annual turnover for competition breaches, arguing that such penalties could be disproportionate.
The association recommended that penalties be capped at one per cent of the relevant turnover directly linked to the affected service or sh100 million, whichever is lower.
On regulatory coordination, KBA called for closer cooperation between CAK and financial sector regulators, including the Central Bank of Kenya, to prevent parallel investigations and conflicting directives.
Regarding the Microfinance Bill, 2026, KBA supported efforts to strengthen oversight but raised concerns about a proposed increase in the minimum core capital requirement for microfinance institutions from sh60 million to sh250 million.
“The proposed increase from sh60 million to sh250 million represents a substantial increase that may not adequately reflect the current operating environment of the sector,” KBA stated.
The association warned that many microfinance institutions continue to face profitability challenges, rising credit losses and capital pressures. It said an immediate increase in the capital requirement could lead to market exits, forced consolidation and reduced access to financial services, particularly for micro, small and medium-sized enterprises and underserved communities.
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