The Governor of Kenya’s Central Bank, Dr. Patrick Njoroge has finally made it clear that Africa’s biggest fintech and highest valued startup Flutterwave is not licensed and should not be operating in Kenya.
“Flutterwave is not licensed to operate as a remittance provider or payments service provider in Kenya. They are not licenced to operate and therefore, they should not be operating,” the Governor said at a virtual post Monetary Policy Committee briefing.
He also noted that Chipper Cash, another fintech in that country, is also not licensed, saying that “I think Chipper Cash, we could also say the same.”
The central bank followed it up with an official circular to all financial institutions on Friday, July 29, 2022, stating categorically that the two fintechs have no license to operate in Kenya so any banks, microfinance company and mortgage finance firms which do businesses with them should quit immediately.
Find the letter attached:
Weeks ago, a court in Kenya froze more than $50 million in accounts belonging Flutterwave over alleged money laundering. Kenya’s Assets Recovery Agency (ARA) was granted a court order to freeze several accounts with three banks belonging to Flutterwave.
A similar fate later befell two other Nigerian fintechs, KoraPay and Kandon Technologies in Kenya for similar allegations; and both of them were said to have been doing business with Flutterwave regarded the deals that were flagged as money laundering.
But Flutterwave issued a statement denying the allegations and claiming that saying its operations were audited and it continuously engaged regulatory agencies to stay compliant.
Flutterwave has been operating in Kenya since its expansion in 2016, and Chipper Cash since 2018.
According to some industry experts, Kenya’s newly-found energy in regulating fintechs can be traced to the release of the Kenya National Payments System (NPS) Vision and Strategy 2021-2025 (PDF) in 2020—a 5-year plan to digitise the country’s payment landscape and establish regulatory standards that make innovation conducive.
It’s also notoriously difficult to get licensed by the CBK. Large companies like Cellulant which has been operating in Kenya since 2003 only got licensed this year. Pepsal has been operational since 2009, but its licence came in less than a year ago.
Both Flutterwave and Chipper Cash are yet to comment on the CBK’s latest statement, but it seems like Kenya is tightening its regulatory processes in preparation for its national elections next month where the country will decide who succeeds President Uhuru Kenyatta 9-year reign.
