Kenya’s banking regulator has barred financial institutions from dealing with Fintech firms Flutterwave and Chipper Cash with immediate effect.
In a letter sent to all CEOs of regulated financial institutions on Friday, CBK‘s deputy Director of Supervision, Matu Mugo, has directed the banks to confirm within seven days of the date (29th July 2022) of the letter to confirm to the regulator on their compliance with the directive.
“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 Money Remittance Services in Kenya are regulated pursuant to the Central Bank of Kenya Act and the Money Remittance Regulations, 2013.” Reads the directive in part.
The regulator has also directed the financial institutions to immediately cease and desist from dealing with Flutterwave and Chipper.
Governor on Fintech Regulation
This directive comes after the Central Bank of Kenya Governor on Thursday told a media briefing that the two Fintechs were not licensed to operate in Kenya.
A court in Kenya recently froze more than $40 million in accounts belonging Flutterwave under the country’s anti-money laundering laws. Kenya’s Assets Recovery Agency was granted a court order to freeze several accounts with three banks belonging to Kenyan-registered Flutterwave Payment Technology Ltd.
On Friday, Flutterwave issued a statement saying it was waiting for a response from the regulator for a Payment Service Provider license it applied for in 2019. The firm has been operating in the country through partnerships with banks and telecom operators.
Flutterwave raised $250 million in its Series D funding earlier this year, growing its valuation to over $3 billion. The fintech is now the highest valued African start-up.