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Central Bank of Kenya (CBK) to Issue Payment License To Fintech Startups 


The Central Bank of Kenya (CBK) is set to issue payment license to fintech startups operating in the country soon. This move marks a significant shift from the regulator’s earlier stance and will open up East Africa’s largest payments market to these innovative firms.

Two prominent fintech companies, Flutterwave and Chipper Cash, are among those hoping to be granted these license.The governor of CBK, Kamau Thugge, stated that the regulator is working diligently to amend the National Payment Systems Act of 2011, aiming to establish a legal framework that will allow fintech firms to operate legitimately.

The proposed changes could be a significant win for remittance and payment providers that have faced investigations and raids by Kenyan authorities over allegations of money laundering. These companies have been operating in a legal gray area due to the lack of clear regulations surrounding their operations.

Thugge acknowledged the need to update the existing payment systems legislation. “We are in the process of updating and amending the Payments Act, basically coming up with a new act,” he said. “We hope to be able to finish that soon, along with the regulations, which will guide our way forward in terms of the payments service providers space.”

The governor’s remarks came in response to a question about the registration status of Flutterwave and Chipper Cash in Kenya during a post-monetary policy committee press briefing.

Kenya’s financial sector is currently regulated under the Central Bank of Kenya Act, the National Payment Systems Act, and the National Payment Systems Regulations of 2014, as well as the e-money Regulations of 2013. However, these laws lack clarity regarding fintech companies, creating ambiguity and hindering their expansion in the country.

This legal ambiguity has led to conflicts between remittance and payment startups and Kenyan authorities. Law enforcement agencies, including the Financial Reporting Sector (FRC) and the Asset Recovery Authority (ARA), have frozen accounts and seized assets of sector players, citing concerns over money laundering.

In 2022, CBK ordered local financial institutions, including banks and mobile money service providers, to sever ties with fintech firms, citing unspecified threats to the country’s financial systems. The regulator claimed that these firms were operating without authorization.

By introducing a clear regulatory framework and issuing payment license to fintech startups, CBK aims to address this legal uncertainty and foster a more inclusive and innovative payments ecosystem in Kenya.



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