Kenya orders banks to cease dealing with fintechs Chipper Cash, Flutterwave

Kenya orders banks to cease dealing with fintechs Chipper Cash, Flutterwave

The Central Bank of Kenya (CBK), has directed all financial institutions in East Africa’s largest economy to cease doing business with pan African fintechs Chipper Cash and Flutterwave saying they were not licenced.

According to TechCrunch, a letter from CBK directed all regulated banks, microfinance and mortgage finance institutions to stop their partnerships with the two startups with immediate effect, a move that has dealt a blow to Flutterwave and Chipper Cash, some of Africa’s highest valued startups.

A letter to bank CEOs followed remarks by CBK’s governor, Patrick Njoroge, that the two startups are not licensed remittance or payment service providers in Kenya — one of the biggest fintech hubs in Africa.

“It has come to the attention of the Central Bank of Kenya that Flutterwave Payments Technology Limited and Chipper Technologies Kenya (Chipper) have been engaging in money remittance and payments services without licensing and authorization by CBK…You are therefore directed to immediately cease and desist from dealing with Flutterwave and Chipper,” said Matu Mugo, CBK’s bank supervision deputy director in the letter.

Flutterwave, which is also facing money laundering allegations in Kenya, in a statement said it has been operating in the country through partnerships with regulated banks and telecoms, as it waits for a payments service provider license it applied for in 2019.

Flutterwave, facilitates cross-border payments transactions of small to large businesses in Africa via one API. Some of its international clients include, Flywire and Uber.

Chipper Cash is also a cross-border payments company with operations in Nigeria, Ghana, Uganda, Nigeria, Tanzania, Rwanda and South Africa.