Foreign Ownership and Market Entry in Kenya’s Financial Services Sector: What CBK and CMA Actually Require

Foreign investors researching Kenya’s financial services sector often start from the assumption that banking, insurance and capital markets all carry the same kind of foreign ownership cap. They do not. Each regulator runs a genuinely different rule, and conflating them is the fastest way to misjudge how much of a Kenyan bank, insurer or licensed intermediary a foreign investor can actually hold, and what approval that holding requires.

Banking: no blanket foreign cap, but a real approval trigger

The Banking Act’s ownership rule is not framed around nationality at all. Section 13(1) caps any single person at 25% of an institution’s share capital, unless that person falls into an exempted category: another institution, the Government of Kenya or a foreign sovereign government, a state corporation, a foreign company already licensed to carry on banking business in its home jurisdiction, or a non-operating holding company approved by the Central Bank of Kenya. A licensed foreign bank, in other words, can sit inside an exempted category and hold up to and including 100% of a Kenyan bank, subject to CBK approval. That is not a theoretical reading: Access Bank PLC’s acquisition of 100% of National Bank of Kenya from KCB Group was approved by CBK on 4 April 2025 under section 13(4) of the Act, with the National Treasury Cabinet Secretary approving the related asset and liability transfer under section 9 on 10 April 2025. Section 13(4) itself is the operative trigger for any change in control, not just full acquisitions: no institution may transfer more than 5% of its share capital to an individual or entity without CBK’s prior written approval, and section 9A requires CBK to certify any “significant shareholder,” defined as a 5% or greater holder, as fit and proper before that shareholding is permitted.

Insurance: a local-ownership floor, not a foreign-ownership ceiling framed the same way

The Insurance Act works from the opposite direction. Section 22 requires that at least one third of an insurer’s controlling interest, whether measured in shares, paid-up capital or voting rights, be held by citizens of an East African Community Partner State, a materially broader category than Kenyan citizens alone but one that still excludes investors from outside the EAC entirely unless the local one-third floor is met by other shareholders. Separately, section 23(4A) caps any person at 25% of an insurer’s paid-up share capital or voting rights, with section 23(4B) capping executive directors and senior officers at 20%, subject to exemptions for regulated entities, government bodies and listed companies. The mechanism that actually blocks an unapproved foreign acquisition is section 25(4): an insurer may not register a share transfer if doing so would reduce the EAC-citizen shareholding below the one-third threshold required by sections 22 or 23, without the Insurance Regulatory Authority’s Commissioner first approving it in writing. A foreign acquirer from outside the EAC needs to structure around that floor from the outset, not treat it as a formality to clear late in the deal.

Capital markets: the cap is being rewritten, and the rewrite is not finished

Capital markets intermediaries, meaning CMA-licensed stockbrokers, investment banks and fund managers, previously operated under a fixed 25% shareholding and voting-rights cap tied to management eligibility under section 29(4) to (7) of the Capital Markets Act. Industry legal commentary reports that the Capital Markets (Amendment) Act, 2025 repealed those fixed thresholds and replaced them with a new section 29(3A), delegating power to the Cabinet Secretary, in consultation with the CMA, to prescribe shareholding limits by category of licensed business through regulations instead of the Act itself. We were not able to independently verify the amended Act’s text against Kenya Law directly, so treat the existence and exact numbering of section 29(3A) as reported by legal commentary rather than independently confirmed, and confirm it before relying on it for a specific transaction. What is independently confirmed at the subsidiary-legislation level is Regulation 53B of the Capital Markets (Licensing Requirements) (General) Regulations: a licensed person may not change its shareholders, directors, chief executive or key personnel without the CMA’s prior written confirmation that it has no objection, and Regulation 54A requires notification of any capital-structure change within five working days. In practical terms, whatever numeric ownership ceiling eventually applies, no CMA-licensed intermediary can be sold to a foreign investor without CMA’s affirmative no-objection first.

What this means for structuring a market entry

The practical consequence of these three genuinely different regimes is that “foreign ownership in Kenya’s financial sector” is not one question. A bank acquisition turns on whether the acquirer fits section 13(1)’s exempted categories and on clearing CBK’s fit-and-proper certification under section 9A. An insurance acquisition turns on preserving the EAC-citizen one-third floor across the whole shareholder register, not just the acquirer’s own stake. A capital markets acquisition turns on CMA’s no-objection process under Regulation 53B, with the underlying numeric ceiling currently in flux pending regulations under the 2025 amendment. A foreign investor evaluating more than one of these sub-sectors, for example a group considering both a bank and an insurer, needs three separate ownership analyses run in parallel, not one market-entry memo that treats “financial services” as a single regulatory category.