A day after the Central Bank of Kenya (CBK), Kenya’s monetary authority, said Chipper Cash and Flutterwave were not allowed to operate in the East African country, the regulator ordered all financial institutions to stop doing business with the two fintechs.
CBK’s Deputy Director of Banking Supervision, Matu Mugo, has ordered all regulated banks, microfinance and mortgage finance institutions to end their partnerships with the two startups with immediate effect, dealing a blow to Flutterwave and Chipper Cash, some of Africa’s most popular startups.
The letter to CEOs followed remarks by CBK Governor Patrick Njoroge that the two startups are not licensed remittance or payment service providers in Kenya – one of the largest fintech hubs in the world. Africa.
“It has come to the attention of the Central Bank of Kenya (CBK) that Flutterwave Payments Technology Limited and Chipper Technologies Kenya (Chipper) have engaged in money transfer and payment services without a license or authorization from the CBK… You are therefore urged to immediately cease and desist from dealings with Flutterwave and Chipper,” Mugo said in the letter.
Flutterwave, which also faces money laundering allegations in Kenya, said in a statement it was operating in the country through partnerships with regulated banks and telecoms, pending a service provider license. of payment requested in 2019.
Flutterwave, which recently raised $250m at a $3bn valuation, facilitates cross-border payments transactions for small and large businesses in Africa via an API. Some of its international customers include Booking.com, Flywire, and Uber. In a February interview with TechCrunch, the African payments giant, with an infrastructure spanning 34 countries on the continent, said it was processing 200 million transactions worth more than $16 billion.
Chipper Cash is also a cross-border payments company with operations in Nigeria, Ghana, Uganda, Nigeria, Tanzania, Rwanda and South Africa.