The Central Bank of Kenya (CBK) has instructed commercial banks, microfinance banks, and mortgage finance companies to immediately cease their partnerships with fintech unicorns, Flutterwave and Chipper Cash, in a circular dated July 29.
“It has come to the attention of the Central Bank of Kenya (CBK) that Flutterwave Payments Technology Limited (Flutterwave) and Chipper Technologies Kenya Limited (Chipper) have been engaging in Money Remittance and Payment Services without licensing and authorisation by CBK,” Matu Mugo, deputy director of bank supervision at the CBK, said in the circular.
“You are therefore directed to immediately cease and desist from dealing with Flutterwave and Chipper,” the circular reads.
This circular is published 24 hours after the apex bank said that Flutterwave and Chipper Cash are not licensed to operate in Kenya as remittance operators and payment services. “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 and therefore they shouldn’t be operating. We can also say the same for Chipper Cash,” CBK’s governor, Patrick Njoroge, said during a Monetary Policy Committee (MPC) meeting on Thursday, July 28.
In a response to the CBK’s July 28 comment on July 28, Flutterwave had said that it entered Kenya through partnership with “banks and mobile operators licensed by the Central Bank of Kenya”. The company also asserts that it submitted an application to operate as a payment service provider in the country and has been in constant communication with the CBK to ensure that it provides all the requirements for licensing and is consequently expecting the issuance of the license.
Kenyan banks were issued a 7-week ultimatum, starting from July 29, to confirm compliance with the directives of the CBK.
