👨🏿🚀TechCabal Daily – Paid-up or priced out

Kenya's fintech landscape is preparing for new capital requirements under a proposed National Payment System Bill. As reported by TechCabal Daily, the Central Bank of Kenya (CBK) is considering raising the minimum paid-up capital for fintech companies from KES 5 million ($39,000) to KES 250 million ($1.93 million). This higher threshold would apply to electronic money issuers, while companies holding multiple licenses would face even more stringent requirements.

The new bill proposes that startup fintechs must meet the capital threshold through fully paid-up shares and disclosed reserves, excluding founder loans, borrowed money, and convertible debt. The bill aims to ensure payment companies have substantial financial backing, but it may impact how startups secure funding and meet regulatory requirements.

In contrast, established financial institutions like commercial banks, microfinance institutions, and state-owned enterprises would only need CBK authorization to operate payment services, provided they fulfill existing capital requirements. Startups would have the opportunity to test payment products in a sandbox environment before fully complying with the licensing process.