Kenya is proposing new capital requirements of up to KES 250 million ($1.93 million) for payment companies, raising the cost of entry for fintechs seeking to compete in the country’s payments market.
Under the National Payment System Bill, 2026, the Central Bank of Kenya (CBK) is establishing mandatory minimum capital thresholds ranging from KES 5 million ($38,610) for basic data services to KES 250 million ($1.93 million) for electronic money issuers. Existing payment providers will have one year from the law’s enactment to align with the new capital rules, subject to CBK guidelines.
The proposed rules could make it harder for early-stage and bootstrapped fintechs to enter the market, particularly because the bill excludes shareholder loans, convertible debt, and other borrowed funds from qualifying as core capital.
Commercial banks, meanwhile, enjoy simplified central bank authorisations and pre-existing reserves, handing established players a decisive market advantage.
“Each licence issued under this Act shall be subject to the condition that the licensee shall at all times maintain the minimum core capital prescribed under this Act and regulations,” a section of the bill read.
How much capital would each payment licence require?
The proposed rules set different minimum core capital requirements depending on the type of payment service or system a company operates.
Under the proposal, entities operating across multiple categories must hold 100% of the capital requirement for their highest-tier licence, plus an additional 50% for each secondary licence category.
The bill further proposes that an entity operating both as an Electronic Money Issuer and an Electronic Wallet Provider will need to lock up KES 275 million ($2.12 million) in core capital.
“Where a payment service provider or payment system operator intends, or has been licensed, to carry on business under more than one licence category, the payment service provider or payment system operator shall hold the amount of minimum capital applicable to the highest-capital category and fifty per cent of the prescribed minimum capital applicable to the additional license category,” the bill said.
Borrowed money won’t count as capital
The bill said core capital must consist of fully paid-up ordinary share capital and disclosed reserves.
“The following shall not constitute paid-up capital: unpaid, partly paid, or contingent capital commitments; shareholder loans or advances; capital raised through borrowed funds, whether directly or indirectly; or revaluation reserves or internally generated intangible assets,” the bill read.
To avoid killing early-stage innovation entirely, the bill establishes a regulatory sandbox that lets firms live-test new payment products without first securing a full licence or raising upfront capital.
Commercial banks, microfinance institutions and state-owned enterprises have a structural edge because they need only CBK authorisation, not a full licence, provided they meet capital adequacy rules.
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