Kenya's fintech company, Wabeh, has decided to downsize its Buy Now Pay Later (BNPL) expansion plan, choosing instead to concentrate on improving underwriting and target specific markets.

Kenya's fintech company, Wabeh, has decided to downsize its Buy Now Pay Later (BNPL) expansion plan, choosing instead to concentrate on improving underwriting and target specific markets.

Kenya's Buy-Now-Pay-Later Market Undergoes Regulatory Shift

The Kenyan buy-now-pay-later (BNPL) sector, which is valued at over $1 billion and projected to grow by 13.6% in 2025, is now formally regulated. The Business Laws (Amendment) Act, 2024, which took effect on December 27, 2024, classifies BNPL providers as Non-Deposit-Taking Credit Providers (NDTCPs), bringing them under the regulatory supervision of the Central Bank of Kenya (CBK).

This regulatory move closes a previous gap where BNPL providers operated largely without formal oversight, despite the sector’s rapid growth in Kenya’s fintech ecosystem. With this new framework, the CBK is empowered to license BNPL operators, set pricing and lending rules, and enforce consumer protection measures, formally integrating BNPL into Kenya’s regulated financial sector.

One of the companies affected by this regulatory change is Wabeh, a Kenyan BNPL provider that works on a B2B2C model, where retailers source smartphones and Wabeh provides the financing layer. Wabeh has scaled back operations with a portion of its vendor network as of July 5, 2025. However, the scaling back only affects a segment of vendors, and all active or paused merchants have been fully paid.

Raul Martinez, Wabeh’s Chief Growth Officer, stated that the move is strategic to reduce exposure to low-volume merchants and improve credit risk controls. The scaling back is part of a shift to refine underwriting models and concentrate on more profitable geographic areas. Wabeh expects to reactivate paused merchants and expand again toward Q4 2025, once the updated models and infrastructure are in place.

The new Bill seeks to bring BNPL providers under direct CBK oversight, replacing older digital lending definitions with broader terms like "credit provider." If passed, the law will formalise the role of firms like Wabeh in the regulated credit space. Customers pay a 30% deposit and choose a weekly, bi-weekly, or monthly repayment schedule.

The Kenyan BNPL sector is under broader scrutiny, and the new Bill aims to place BNPL under CBK’s purview, replacing terms like "digital credit" with broader language. Some customers have abandoned payment after misjudging the cost burden, despite a remote lock app to manage risk. The scaling back by Wabeh and the regulatory changes reflect the early market and regulatory shifts within Kenya’s growing BNPL market.

This development marks a significant advancement in fintech regulation in Kenya, aiming to improve consumer protections and market stability. As the BNPL sector continues to evolve, it is expected that more companies will follow Wabeh's lead in adapting to the new regulatory environment.

1. The regulatory shift in Kenya's buy-now-pay-later (BNPL) market, as a result of the Business Laws (Amendment) Act, 2024, allows investment in startups like Wabeh operating within the sector, as they are now classified as Non-Deposit-Taking Credit Providers (NDTCPs) under the supervision of the Central Bank of Kenya (CBK).
2. With the new regulations, technology companies involved in the BNPL business, such as Wabeh, are obliged to follow the CBK's guidelines for lending rules, pricing, and consumer protection measures, creating a more regulated and safer environment for technology-driven finance business.
3. The scaling back of Wabeh's operations and the refinement of underwriting models demonstrate the company's desire to leverage technology for more profitable business opportunities by adapting to the new regulatory environment, contributing to the growth of Kenya's fintech ecosystem and technology-driven payments industry.

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