Kenya’s fintech laws, Airtel Telkom and Carbon sanctions attain $ 243 million – Techpoint Africa

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Good day,

Oluwanifemi and Emmanuel Here

Today we discuss:

  • Kenya’s mobile money regulations
  • The Kenyan supervisory authority sanctions two telecommunications companies for poor service quality
  • Carbon Financials take a look

Kenya’s mobile money regulations

The Kenyan central bank is keen to tighten its regulatory rules for digital payment services like mobile money. It has therefore published a draft national payment strategy for public comments.

Why? Kenya’s mobile money space is perhaps one of the greatest success stories in the world. With millions of people moving in Kenya every day, the regulator claims they want to protect themselves from fraud.


The country’s cabinet secretary is quoted as saying that digital payments pose an increased risk of fraud and cybercrime and could lead to losses in potential government revenues, customer deposits and a decline in market confidence.

The background: Supported by some strict regulations and the great success of Safaricom’s M-Pesa, digital payments in Kenya have increased by leaps and bounds. The threat of COVID-19 and the waiver of mobile money fees only appear to have increased mobile money transactions.

Between January and November 2019, Kenyans made mobile money transactions worth up to $ 47 billion. This feat is all the more impressive given its 56 million inhabitants.

Funny fact:: Safaricom’s M-Pesa controls 98% of the Kenyan mobile money market. Airtel Money and other mobile money providers only account for 1.2%.

Regulation and growth: With such an in-depth ecosystem for digital payments, a fair question would be what kind of regulation is driving such immense growth. Well there were several.

From the Electronic Payment and Settlement System (KEPSS) in Kenya to the NPS ACT of 2011, there are a number of regulations in Kenya that protect the mobile payment space. For the most part, we might consider these regulations to be successful.

What changes? The government wants tighter control over digital payments to influence factors like pricing and tariff rules. In short, it believes that these services should be cheaper and more affordable for customers.

It is also increasing its telecommunications influence and trying to encourage more competition in space.

Trouble for Safaricom? Given the recent success of space, this move seems to have too much regulatory scrutiny. By tightening price controls, Kenyan Apex Bank can determine how much these companies charge for their services.

Safaricom may need to be careful considering the government already wants M-Pesa to be separated from the Safaricom brand to improve competition. No matter what, this space is worth keeping an eye on.

This is another move by the government to control the country’s financial sector. In other parts of the world it can get a lot tougher and more ambitious.

Developing Countries and Their Recurring Plan to Ban Cryptocurrency

Even India is in the process of passing a law banning Bitcoin and other private cryptocurrencies for the second time in two years.

After the ban, the country plans to introduce a framework for an official digital currency – possibly a digital version of fiat currency – issued by the Reserve Bank of India (RBI). This is to create the impression that the country is not planning to stifle the technology and use, but rather to promote it. Good…

It seems that the RBI has been a heavy critic of the cryptocurrency since it gained prominence in India. But, with this move, doesn’t it defeat the idea of ​​cryptocurrencies given the technology on which it is based, blockchain? I mean, with the RBI, you can’t even keep transactions anonymous, let alone determine volatility.

Background story: When the RBI tried to ban banks and financial institutions from accepting crypto in 2018 – knowing it would stifle transactions – affected stakeholders took them to court and won, giving crypto its current legal status in the country. Now comes the second blow, this time from the Treasury’s table instead of the central bank.

But thenThere is a constant call to regulate instead of forbid. How difficult is it to regulate these currencies compared to a total ban? However, if that bill fails, India is on its way to returning to the status quo.

Further reading: The SEC cryptocurrency declaration: what does the SEC regulate?

The Kenyan supervisory authority sanctions two telecommunications companies for poor service quality

What happened? Following the 2020 Telecommunications Quality Review, the Kenyan Communications Authority (CA) issued a non-compliance notice to Airtel and Telkom Kenya for failing to meet the 80% call service quality threshold set in the country.

With 52% and 73% respectively, CA has hired the two telecommunications companies to improve their services or risk a 0.2% fine on their revenue – this can go as high as Ksh 70 million ($ 635,497). Safaricom, market leader, scored 92% and was able to avoid this ordeal.

The results have been calculated based on the number of outages and network incidents recorded for the year ending June 2020. In nine counties this was even worse than in other countries, as the two telecommunications companies only achieved 20% at these locations.

For your information, This step is no different from the regulator. In 2018, all three operators were fined a total of Ksh 311 million (US $ 2.8 million) for the same incident that occurred between 2015/2016. In 2020, the Commission published a document protecting subscribers’ right to compensation for poor performance.

You must receive or be credited an amount corresponding to the time in which you did not have access to voice and SMS services, unless the failure is due to planned maintenance work.

In large part, it’s a good sign that subscribers are getting value for what they pay for. But this definitely wouldn’t get the same reaction from telecommunications companies.

Wait a minute: Before we shadow these telecommunications companies, we may need to understand the factors that can be responsible for outages and disruptions. In fairness, quality of service depends largely on location and infrastructure, one or both of which are sometimes beyond the control of telecommunications companies.

For a place like Nigeria, with an increasing statistic of subscriber complaints reflecting poor service, the government is finding a way to share and collocate infrastructure. However, this isn’t even a guarantee.

And what about the situation? The other day I found out that some places in African countries promoting 5G don’t even cover 4G and some can barely support 2G and 3G. If these challenges are not addressed, telecommunications companies can hardly promise an end to their terrible customer experiences. While they wait for a permanent solution to power outages – something Safaricom may have figured out – they should prepare for the sanctions.

Speaking of which This article will help you better understand my point of view.

Carbon generates $ 243 million in transactions

The Nigerian digital bank Carbon, formerly Paylater, has given a little insight into its financial data for 2020. This practice, common in foreign markets, is a rarity in Africa and has earned the startup some praise.

Chijioke Dozie stated that the company aims to build trust with its customers and support its recruitment process with annual financial data releases.

The company promises its annual report will appear in the second quarter of 2021, but here’s a sneak peek at some key metrics for 2020:

  • Customer base – 659,000
  • Payments Processed – 96.5 billion (($ 243 million), 89% more than 2019
  • Loans Disbursed: 25.21 billion (($ 63.6 million), up 9.1% from 2019
  • Investments: 13.02 billion (($ 32.8 million), 365% more than 2019.

A nugget: Carbon has raised $ 15 million so far, and another big round could be on the way.

Important observations: In 2019, loan disbursements saw 77% growth from 2018 and 666% growth from 2017, but that fell to 9% as the company apparently expanded its tentacles to other banking activities.

The company recorded $ 2.8 billion in investments in 2019, but these increased to $ 32.5 million.

The naira is not funny: The value of Carbon’s loans disbursed – in US dollars – was $ 63.9 million in 2019 and $ 63.6 million in 2020. Nigeria’s free falling naira has caused the dollar to decline slightly despite a 9.1% increase.

* Please note that the exchange rate used was the value of the naira as of December 31, 2020 – ₦ 396 / $ 1.

Start-up funding

Tayary, an Egyptian logistics startup, has launched an undisclosed pre-seed fund from a syndicate of angel groups. AUC Angels, Alex Angels and Cairo Angels are involved in this round.

Serving B2B and B2C customers for groceries, groceries and healthcare delivery, the startup has added more features to its services since its launch in 2017. The funds will be used for expansion, increasing the employee base and aggressive marketing.

What else are we pursuing

Have a great day!
Oluwanifemi Kolawole & Emmanuel Paul for Techpoint Africa.

February 1: From Archives of Built in Africa – Voyc: Artificial Intelligence from Africa to the World

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