The Central Bank of Kenya (CBK) has said payments fintech Flutterwave and Chipper Cash are not licensed to operate in Kenya in what could be a major blow to the two fast-rising African startups.
CBK governor Patrick Njoroge while responding to questions during Wednesday’s Monetary Policy Committee (MPC) meeting said the two firms are not allowed to operate remittance businesses or offer payment services to merchants in the country.
The two unicorns with the backing of wealthy investors from the West have rapidly expanded across the continent in recent years to the chagrin of regulators accusing them of increasing fraud and moving of illicit cash with lax requirements.
“Flutter wave is not licensed to operate remittance provider or for that matter as a Payment Service Provider in Kenya. They are not licenced to operate and therefore they shouldn’t be operating. And Chipper we could also say the same,” said Dr Njoroge.
Flutterwave is currently at the centre of a complex money-laundering probe by the Assets Recovery Authority (ARA) and it has been unclear whether the company has regulatory approvals to operate in the country.
The High Court early this month froze more than Sh6.2 billion spread in 62 bank accounts belonging to the Nigerian start-up and four Kenyans on fears they are proceeds of card fraud and money laundering.
The billions in Guaranty Trust Bank (GTB), Equity, EcoBank, KCB and Co-operative Bank accounts were frozen after the Assets Recovery Agency (ARA) applied to block the transfer or withdrawal, pending the filing of a petition to have the money forfeited to the government.
The payments technology firm was founded in 2018 by Olugbenga Agboola and Iyinoluwa Aboyeji and has offices in Lagos, Nigeria and on 1323 Columbus Avenue, San Francisco, US.
The company states on its website that it has operations in 34 African countries including Nigeria, Kenya, Uganda and South Africa.
In February the company raised Sh28.41 billion in series D fund drive largely for funding mergers and acquisitions in the growing payments market on the continent.
The Business Daily is yet to establish whether the two companies have applied for regulatory approvals in the past.
Chipper Cash was founded in 2018 by Ugandan Ham Serunjogi and Ghanaian Maijid Moujaled to offer instant cross-border mobile money transfers in Africa.
The company is headquartered in San Francisco, California, United States and has raised over Sh35.9 billion ($302.2 million) in funding with the last being a Series C round in November last year.
The peer-to-peer payment services platform operates across nine countries including Ghana, Uganda, Tanzania, Rwanda, Nigeria, South Africa, and Kenya. Other are the US and the UK.