THE Central Bank of Kenya (CBK) has banned fintech unicorns, Flutterwave and Chipper Cash, from operating in Kenya, saying they are not licensed.
Flutterwave is yet to obtain a Payment Service Provider (PSP) licence from Kenya’s central bank, despite having applied for it since 2019.
Patrick Njoroge, CBK’s Governor, revealed this during a Monetary Policy Committee (MPC) meeting to chart a new course for payment platforms in the country.
“Flutterwave is not licensed to operate as a remittance provider or, for that matter, as a PSB service provider in Kenya.
“They are not licensed to operate, so they shouldn’t be operating. We can also say the same for Chipper Cash,” Njoroge said.
Flutterwave had recently gained approval from the Bank of Tanzania (BoT) to launch its payment service in the country.
To operate as a fintech company in Kenya, the firm must have a PSP licence, which provides a finance wallet and an International Money Transfer Operator (IMTO) licence.
However, Flutterwave operates in East Africa’s biggest economy through partnerships with lenders and mobile network firms with licences.
Weeks ago, a Kenyan court froze over $50 million in accounts belonging to Flutterwave over alleged money laundering.
In a tweet, Victor Asemota, an investor, stated that obtaining PSP licences can be difficult due to Kenya’s stringent regulatory rules.
“The truth about fintechs and how long it takes them to operate before they get licences in Kenya. I tried to invest in iPay, which I am familiar with, in 2010.
“So, let’s kill the narrative of Nigerian fintech breaking the laws,” Asemota said.
He regarded the ban as “harsh” on foreign companies operating in Kenya
Notably, Kenyan fintech companies, like Cellulant founded in 2003, had been operating in the country until they got licensed in February.
Pesapal, a Kenyan fintech firm that offers e-commerce, point-of-sale and consumer applications on one platform, which was founded in 2009, had been operating before it was licensed in 2021.
Others fintech companies which operated for years without a PSP licence included Jambopay, sasapay, ipay and finserve.
While Flutterwave has been operating in Kenya since 2016, Chipper Cash started operations in 2018.
