Hours after the Central Bank of Kenya (CBK), Kenya’s monetary authority said that Chipper Cash and Flutterwave were not licensed to operate in the East African country, the regulator has directed all financial institutions to cease doing business with the two fintech firms Flutterwave and Chipper Cash.
In a letter to chief executives, the CBK’s bank supervision deputy director, Matu Mugo, directed banks to end links with the fast-growing payments unicorns which could mean closing all accounts and freezing the cash. The lenders are to report back to CBK within seven days.
“It has come to the attention of the Central Bank of Kenya (CBK) that Flutterwave Payments Technology Ltd and Chipper Technologies Ltd have been engaging in the money remittance business without licensing and authorisation by CBK,” the letter from the regulator reads.
“Money remittance services in Kenya are regulated pursuant to the Central Bank of Kenya Act and the Money Remittance Regulations, 2013. Further, money payment services in Kenya are regulated pursuant to the National Payment System Act and the National Payment System Regulations, 2014.”
Remarks by CBK’s governor, Patrick Njoroge, followed the letter’s publication stating that the two startups are not licensed remittance or payment service providers in Kenya — a major tech hub in Africa and strategic location for the two fintech firms.
The two unicorns have raised significant funds that have aided in their rapid expansion across the continent in recent years.
Flutterwave was founded in 2018 by Olugbenga Agboola and Iyinoluwa Aboyeji and has offices in Lagos, Nigeria and 1323 Columbus Avenue, San Francisco, US.
Chipper Cash was founded in 2018 by Ugandan Ham Serunjogi and Ghanaian Maijid Moujaled to offer instant cross-border mobile money transfers in Africa.