Fintech Fundraising: Kenya's Payment Bill Could Slow Investment With Central Bank Approval RulesFintech Fundraising: Kenya's Payment Bill Could Slow Investment With Central Bank Approval Rules
Key Highlights
- Investors acquiring 10% or more of a Kenyan payment firm would need prior written approval from the Central Bank of Kenya under the draft National Payment System Bill, 2026.
- Minimum capital would range from KSh 5M ($0.04M) to KSh 250M ($1.93M) depending on licence, and only paid-up share capital and disclosed reserves would count towards it.
- Existing operators would get a one-year transition after the bill becomes law, but the draft is still a proposal and the public comment window closed on 9 October.
Kenyan payment start-ups that want to sell a stake of 10% or more would first need written approval from the Central Bank of Kenya (CBK) if the draft National Payment System Bill, 2026 becomes law, a requirement that could lengthen fundraising rounds.
The proposal matters because most Kenyan fintechs depend on outside capital to grow, and each new investor would face the same vetting as existing shareholders. The draft is still a proposal, not law.
What the draft asks of investors
The National Treasury and the CBK published the draft bill and a companion policy for public comment in September.
According to a summary by law firm Bowmans any merger or acquisition of a payment service provider or operator would need CBK approval, as would a significant change of ownership, defined as acquiring 10% or more of the shareholding.
New significant shareholders would undergo the same vetting as existing ones. For a start-up closing a round with a foreign fund, that adds a regulatory step before money can change hands.
Higher capital, narrower ways to meet it
The bill also sets minimum capital by licence category. An electronic money issuer would need KSh 250M ($1.93M), while a payment initiation service provider would need KSh 5M ($0.04M), according to Bowmans. A firm holding two licences would pay the larger requirement plus half of the second; an issuer that is also an e-wallet provider would need KSh 275M ($2.12M).
Only fully paid-up ordinary share capital and disclosed reserves would count. Shareholder loans, convertible debt and borrowed funds would not, which pushes founders towards equity rounds, the very rounds that would now need approval.
As Mwenendo earlier reported, the same draft gives the CBK 90-day takeover powers over troubled payment firms, so the proposal tightens oversight on entry, ownership and failure.
Timing and what it means for fintechs
Comments on the draft were due by 9 October 2026, and existing operators would get a one-year transition after enactment. The Treasury and CBK have not yet published a final bill.
Mwenendo also carried a critical view of the draft's supervisory reach, arguing it could slow innovation. Supporters say stronger rules protect customer balances.
For founders, the practical test is how fast the CBK would decide on ownership changes, a timeline the draft summary does not set out.
In Summary
- Who would need approval?
- Any buyer of 10% or more of a Kenyan payment service provider or operator, plus parties to mergers or acquisitions.
- What does the draft require?
- Prior written approval from the Central Bank of Kenya for significant ownership changes, with new shareholders vetted like existing ones.
- When would it apply?
- Not yet. Comments closed on 9 October 2026, and existing operators would get a one-year transition after enactment.
- Where does it apply?
- Kenya's payments sector, covering licensed payment service providers and operators.
- Why does it matter?
- Fundraising by fintech start-ups could take longer, and only paid-up equity and reserves would count towards minimum capital.
- How much capital is required?
- From KSh 5M ($0.04M) to KSh 250M ($1.93M), depending on licence category, according to Bowmans' summary of the draft.