Kenya and Rwanda Move Toward Cross-Border Fintech Licensing

The initiative, announced by the Central Bank of Kenya and the National Bank of Rwanda, introduces plans for a “licence passporting framework” that would allow payment companies licensed in one country to expand operations into the other without undergoing a full, separate licensing process. 

The agreement was signed on March 11 during the Inclusive FinTech Forum in Kigali, where regulators outlined a roadmap to simplify cross-border payment services and reduce regulatory barriers for fintech companies operating in the region. 

A new model for fintech expansion

Under the proposed framework, payment service providers approved in either Kenya or Rwanda could operate more easily in the other jurisdiction through mutual regulatory recognition. Rather than applying for a completely new license, firms would be able to rely on their existing regulatory approval while remaining subject to joint supervision by both regulators. 

Currently, fintech companies seeking to expand across African borders must typically obtain separate licenses in each country—a process that can be time-consuming, expensive and administratively complex.

Regulators say the passporting framework aims to remove these obstacles while maintaining oversight and regulatory safeguards.

Boosting regional digital payments

Officials believe the initiative could significantly accelerate cross-border digital payments and financial innovation in East Africa.

By harmonizing licensing rules, the two countries hope to make it easier for fintech startups and payment service providers to scale across borders, particularly in areas such as remittances, merchant payments and digital wallets.

The agreement also aligns with broader efforts under the East African Community to strengthen regional financial integration and build a more connected payments infrastructure across member states.

Lower costs, faster market entry

Industry analysts say the move could reduce compliance costs and speed up expansion for fintech companies seeking to serve multiple African markets.

Regulatory passporting models are widely used in other regions, including the European Union, where financial firms can operate across multiple countries under a single regulatory framework.

If successful, the Kenya–Rwanda model could serve as a blueprint for wider fintech integration across Africa, particularly as the continent works to strengthen cross-border trade and financial flows under the African Continental Free Trade Area.

For fintech startups building payment infrastructure across Africa, the agreement signals growing regulatory momentum toward a more unified and scalable digital financial ecosystem on the continent.

SOURCE: AGENCIES