Regulating fintechs in Kenya
Finance

Regulating fintechs in Kenya

No one can deny the rise of fintechs in Africa over the last couple of years. According to a research by Disrupt Africa, Fintechs in Africa raised USD 320 million in investments and saw an average of 60 percent growth since January 2015. The report puts the number of fintech companies in Africa at 491.

But the rise of mobile banking offerings from third parties is raising concerns over the regulation of fintechs, especially in a growing market such as Kenya.

In Kenya specifically, the popularity of mobile payments has opened up several opportunities for fintech firms that rely on the technology. Companies such as Branch and Tala depend fully on the mobile money ecosystem to deliver payments to loan applicants; PesaPal, JamboPay and M-Paya are assisting individuals and corporations to make and receive payments through mobile money.

Many banking firms also have their own fintech products, but these are governed under the Central Bank of Kenya (CBK). Third party apps such as Tala, Branch and Okash do not have legal oversight and experts warn that they could jeopardize customer information.

The CBK governor Patrick Njoroge confirmed this during a past Afro-Asia fintech summit in Nairobi. "They [fintech firms] are unregulated because there is no such law today," he said.

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Vincent Matinde

Vincent Matinde is an international IT Journalist highlighting African innovations in the technology scene.

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