Lengthy Licensing Stumps Kenyan Fintech Startups

Fintech startups face significant challenges when expanding to Kenya, primarily due to the lengthy and complex process of obtaining an operating license. Obtaining a payment service provider (PSP) license can take up to two years, forcing startups to rely on workarounds such as partnerships with established players like telcos and banks. High market entry barriers and evolving regulations have hindered progress, allowing traditional players to maintain dominance. One potential solution to this problem is “license passporting,” a regulatory mechanism that would allow fintechs to operate in multiple countries within a region without needing separate licenses for each. While no African country has adopted this approach yet, its implementation could simplify cross-border operations and benefit consumers with lower prices, better products, and more choices.