Expanding a fintech business across African borders has long been a complex process. Payment companies often face multiple regulatory approvals, separate licensing frameworks, and varying compliance requirements, all of which can slow down regional expansion.

Regulators in Kenya and Rwanda are now attempting to remove some of those barriers.


The Central Bank of Kenya and the National Bank of Rwanda have signed a memorandum of understanding (MoU) designed to streamline licensing procedures and strengthen cross-border payment services between the two countries. The agreement was formalised during the Inclusive FinTech Forum held in Kigali.


A Passporting Model for Fintech Expansion

A central feature of the agreement is the proposed introduction of a passporting framework. If implemented, this system would allow payment service providers licensed in one country to operate more easily in the other without going through a full regulatory licensing process again.

For fintech startups and payment companies, this could significantly reduce the cost and complexity associated with entering new markets


Currently, firms attempting to expand regionally must navigate separate licensing systems even when regulatory requirements are largely similar. This duplication of approvals not only increases operational costs but also slows down innovation and market expansion.

By creating mutual recognition between the two regulatory systems, the initiative aims to accelerate the growth of cross-border digital financial services.



Part of a Broader East African Payments Strategy


The agreement is also aligned with the East African Community (EAC) cross-border payments master plan, which seeks to improve interoperability between payment systems across the region.


Improving the ability to move money seamlessly across borders has become a priority for many African economies, particularly as digital payments and mobile money adoption continue to grow.


Kenya’s financial technology ecosystem, widely regarded as one of the most advanced on the continent, has played a major role in shaping this shift.


Innovations such as M-Pesa transformed mobile payments in Africa and inspired similar systems across several countries. Regulators now increasingly see regional cooperation as essential for enabling faster transactions, supporting fintech growth, and improving financial inclusion across borders.


If the Kenya–Rwanda framework succeeds, it could serve as a model for similar regulatory partnerships across other African markets.


Kenya’s Parliament Questions Vodacom’s Dividend Rights in Safaricom Deal


Meanwhile, a separate financial development in Kenya is attracting growing scrutiny from lawmakers.


Members of parliament have directed the government to renegotiate elements of its agreement with Vodacom related to future dividend payments from Safaricom, raising concerns that the initial deal may have given away too much long-term value.


The Controversial Dividend Arrangement


The issue stems from a broader transaction in which the Kenyan government sold a 15% stake in Safaricom to Vodacom. The deal forms part of a multi-billion-dollar arrangement that could eventually give the South African telecom company majority control of the telecom giant.


Alongside the share sale, the government agreed to grant Vodacom rights to approximately KSh 55.7 billion in future Safaricom dividends. In exchange, Vodacom made an upfront payment of about KSh 40.2 billion, effectively purchasing those future earnings at a discount.


For the Kenyan government, the arrangement provided immediate liquidity during a period when funds were needed for infrastructure development and other fiscal priorities.


However, critics argue that selling rights to future dividend streams from one of the country’s most profitable companies could reduce government revenues over the long term.



Why Safaricom Matters to Kenya’s Economy


The debate is particularly sensitive because Safaricom plays a central role in Kenya’s digital economy.


Beyond being the country’s dominant telecommunications provider, the company operates M-Pesa, one of the most influential mobile money platforms in the world. The service has transformed how millions of people send money, pay bills, and access financial services.


Safaricom has also historically been one of the Kenyan government’s largest dividend contributors, making it a critical source of public revenue.


That reality explains why the decision to sell part of the government’s stake—and the associated dividend rights has become one of the most closely examined corporate transactions in East Africa.

As parliament continues reviewing the agreement, the outcome could reshape both the structure of the deal and the future financial relationship between the Kenyan government and one of its most valuable corporate assets.