Central Bank of Kenya instructs banks to stop dealing with Flutterwave and Chippercash

The Central Bank of Kenya has ordered all financial institutions in Kenya to stop dealing with Flutterwave and Chipper Cash because “they are operating without licensing and authorisation by CBK.”

According to Matu Mugo, CBK’s deputy director of bank supervision in the circular, “It has come to the attention of the Central Bank of Kenya (CBK) that Flutterwave Payments Technology Limited (Flutterwave) and Chipper Technologies Kenya Limited (Chipper) have been engaging in Money Remittance and Payment Services without licensing and authorisation by CBK.”

“You are therefore directed to immediately cease and desist from dealing with Flutterwave and Chipper,” the circular reads.

This circular was released after the CBK’s governor statement during a Monetary Policy Committee (MPC) meeting on Thursday, July 28. According to the CBK governor, Patrick Njoroge, “Flutterwave is not licensed to operate as a remittance provider or for that matter as a Payment service provider in Kenya. They are not licensed to operate and therefore they shouldn’t be operating. We can also say the same for Chipper Cash.”

Payment service providers (PSPs) are regulated by the CBK, which has oversight over the financial products they offer, and the Communications Authority of Kenya (CA), which regulates the Global System for Mobile Communications (GSM) component.

In response to the CBK’s statement on Thursday, Flutterwave said it was waiting for a response from Kenya’s Central Bank for a Payment Service Provider license it applied for in 2019, after operating in East Africa’s biggest economy through partnerships with lenders and mobile network firms.

Flutterwave added “We have been in constant engagement with the Central Bank of Kenya to ensure that we provide all the requirements, and we look forward to receiving our license. We are committed to operating within the stipulated laws, regulations, and industry standards in Kenya.”

Financial institutions in the country are required to confirm compliance with the directive within seven days, starting from today, July 29.

The development comes days after the Asset Recovery Agency (ARA) in Kenya issued orders to a high court to freeze 56 accounts holding Sh7 billion ($59.2 million) belonging to foreign nationals and entities including Flutterwave due to money laundering charges.