A day after Kenya’s Central Bank (CBK), Kenya’s monetary authority, said that Chipper Cash and Flutterwave were not licensed to operate in the East African country, the regulator has ordered all financial institutions to stop doing business with the two fintechs.
The deputy director of the CBK, Matu Mugo, ordered all regulated banks, microfinance and mortgage financing institutions to end their cooperation with the two startups with immediate effect.
The letter to the CEOs followed comments from CBK Governor Patrick Njoroge that the two startups are not licensed money transfer or payment service providers in Kenya – one of the largest fintech hubs in Africa.
“It has come to the attention of the Central Bank of Kenya (CBK) that Flutterwave Payments Technology Limited and Chipper Technologies Kenya (Chipper) are engaged in money transfer and payment services without license and authorization by CBK… stop and stop dealing with Flutterwave and Chipper,” Mugo said in the letter.
Flutterwave, which is also facing charges of money laundering in Kenya, said in a statement that it operates in the country through partnerships with regulated banks and telecoms while awaiting a payment services license it applied for in 2019.
Flutterwave, which recently raised $250 million at a valuation of $3 billion, facilitates cross-border payment transactions from small to large businesses in Africa through a single API. Some of its international clients are Booking.com, Flywire and Uber. In a February interview with TBEN, the African payments giant, with infrastructure reach in 34 countries on the continent, said it processed 200 million transactions worth more than $16 billion.
Chipper Cash is also a cross-border payment company with operations in Nigeria, Ghana, Uganda, Nigeria, Tanzania, Rwanda and South Africa.