Kenya Proposes Higher Capital Threshold for Payment Companies
The Central Bank of Kenya (CBK) has proposed significant changes to its payment licensing framework, requiring fintechs and other payment service providers to maintain capital reserves ranging from $39,000 to $1.93 million.
New Licensing Requirements
Under the draft National Payment System Bill published Monday:
- Basic data services: Minimum KES 5 million ($39,000)
- Electronic money issuers: Up to KES 250 million ($1.93 million)
- Firms with multiple licenses may face higher requirements
Existing providers have one year to comply.
Implications for Startups
The bill distinguishes between fully paid-up capital (which counts) and other forms of funding like founder loans or convertible debt (which do not). This could favor companies that raise equity financing early on.
Smaller fintechs may find it more challenging to meet the new requirements, potentially limiting competition in the sector. However, a regulatory sandbox will allow startups to test payment products before seeking full licensure.
Open Banking Initiative
The bill also proposes allowing customers to authorize third-party fintechs access to their bank and mobile money data—a move towards open banking.
This could enable:
- Fintechs to build services without owning customer accounts
- More competition through innovation
- Greater transparency in the financial system
The CBK will develop regulations outlining what data can be shared, how access works, and whether fintechs can charge for this service.