Kenya, Rwanda sign digital payments licence passporting deal
Kenya and Rwanda have agreed to a framework allowing fintechs licensed in one country to operate in the other without new regulatory approvals. The Central Bank of Kenya (CBK) and National Bank of Rwanda (NBR) signed a memorandum of understanding to create a licence passporting system, enabling regulators to recognize each other's licensing regimes and coordinate supervision. This addresses a key barrier: fintechs expanding across borders currently need separate licences in each market, even with similar requirements, slowing growth and increasing compliance costs. Under the new framework, a Kenyan fintech could operate in Rwanda without a fresh licence, while regulators maintain oversight in their jurisdictions. The CBK stated this tackles duplicative regulatory processes despite similar requirements. If implemented, the system could shorten market entry times and expand merchant networks, supporting the East African Community's Cross Border Payment System Masterplan to connect regional payment systems and ease digital transactions. Kenya, home to M-PESA with 40 million users, is a major digital payments hub, while Rwanda aims to position itself as a regional fintech hub through regulatory reforms.