Rising terror financing concerns prompt stricter PBO regulations
National
By
Jacinta Mutura
| Apr 14, 2026
PBORA Director/CEO Laxmana Kiptoo presents a gift to First Lady Rachel Ruto during the launch of PBO week 2026 at KICC, April 13, 2026. [Edward Kiplimo, Standard]
Kenya’s Public Benefit Organisations (PBOs), formerly known as Non-Governmental Organisations, have been put on notice over the risk of being exploited for terrorism financing.
Speaking during the launch of PBO Week in Nairobi, Financial Reporting Centre (FRC) Director General Naphtaly Rono said charities and non-profits remain vulnerable due to their reliance on foreign funding and operations in high-risk areas.
“Globally, there is growing recognition that Public Benefit Organisations are exposed to abuse by terrorist organisations, particularly in terms of the use of these structures for unlawful ends,” said Rono.
“This is not a reflection of the sector’s failure, but a call to strengthen safeguards. We need to be alert and guard against exploitation by terrorist organisations,” he added.
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He spoke during the launch of PBO Week at KICC, where stakeholders witnessed the release of a sector report and the launch of the PBO Act regulations.
Rono warned that evidence from the Financial Action Task Force shows non-profits have been used in some countries as channels for terrorism financing. He noted that organisations operating near conflict zones, especially along Kenya’s Somalia border, face higher risks of exploitation.
CS Ministry of Interior and National Administration, Kipchumba Murkomen at KICC, April 13, 2026. [Edward Kiplimo, Standard]
“PBOs rely on donations, particularly international donations, and therein lies the vulnerability to terrorist financing abuse,” he said.
The warning comes as Kenya works to exit the FATF grey list, which flags countries with weaknesses in combating money laundering and terrorism financing. It also comes as the country transitions from NGOs to PBOs under new legal reforms.
The Government is rolling out stricter regulations under the Public Benefit Organisations Act to improve accountability and transparency. After more than a decade in limbo, the 2013 Act is now operational following the recent approval of regulations.
The Chief Executive Officer of the Public Benefit Organisations Regulatory Authority (PBORA), Dr Laxmana Kiptoo, said the transition will enhance accountability.
Public Benefit Organisations Regulatory Authority Director/CEO Laxmana Kiptoo at KICC, April 13, 2026. [Edward Kiplimo, Standard]
“Once an organisation is registered, it ceases to be solely its own and becomes accountable to the public. That is why it must report annually,” he said.
The new framework will classify organisations as high, medium or low risk, depending on their funding sources, governance and operating environment.
First Lady Rachel Ruto praised PBOs for their impact in rural and urban areas, describing them as key partners in development. She said they are often the first responders and play a central role in bridging policy and communities.
Principal Secretary for Internal Security Dr Raymond Omollo, in remarks read by Beverly Opwora, said the Act provides a facilitative framework that enhances transparency and regulation of the sector.
Interior Cabinet Secretary Kipchumba Murkomen urged compliance, saying the Act reflects a more structured and accountable phase of development. He cautioned the regulator against punitive enforcement ahead of the May 13, 2026, transition deadline, directing that no organisation should be shut down for failing to comply on time.
He also instructed PBORA to maintain an asset inventory to protect organisational property during the transition. Murkomen further urged the sector to strengthen local support, noting that over 76 per cent of funding currently comes from the United States and Europe.
According to the sector report, PBOs contributed Sh246.7 billion to Kenya’s economy in the 2024/25 financial year and directly employ more than 60,000 people, mainly in health, education, agriculture and humanitarian work.