The Central Bank of Kenya and the National Bank of Rwanda have signed an MoU to create a Licence Passporting Framework, allowing payment firms licensed in one country to operate in the other without repeating the full regulatory approval process.
The agreement, announced by CBK in March 2026, directly targets what regulators describe as duplicative licensing: fintech companies, mobile money operators, and digital payment firms currently face near-identical regulatory requirements in both markets yet must go through separate approvals in each. The passporting framework removes that friction.
- Under the framework, a payment service provider licensed in Kenya gains a streamlined path to operate in Rwanda, and vice versa. Full regulatory oversight in both jurisdictions is preserved: neither central bank relinquishes supervisory authority over firms operating in its market.
- The MoU is anchored in the EAC Cross-Border Payment System Masterplan, which sets out a regional vision for a more integrated payments landscape across East Africa’s seven member states.
- Kenya and Rwanda are considered the two most advanced digital payments markets in the EAC bloc. Kenya’s M-Pesa ecosystem processes over 60% of the country’s GDP in annual transaction value. Rwanda has built a dense fintech regulatory framework and hosts a growing number of digital financial services firms.
- The framework is designed to accelerate innovation by lowering the cost and time burden of market entry, supporting cross-border trade flows, and improving remittance infrastructure between the two countries.
The EAC has long sought deeper financial integration but progress has been uneven, often blocked by regulatory nationalism and divergent licensing regimes. Kenya and Rwanda’s bilateral passporting deal sidesteps the slower multilateral process and creates a working model that other EAC members could replicate. Uganda, Tanzania, and the DRC all have growing fintech sectors that face similar cross-border friction. If the Kenya-Rwanda framework proves effective, it becomes the template for a genuinely integrated East African payments corridor, one that could meaningfully reduce the 7% to 9% cost of remittances that currently drain billions from intra-regional flows annually.
Bigger picture: Licence passporting is already standard practice in the EU’s financial services single market, where it has underpinned decades of cross-border fintech growth. Applying that model to East Africa is structurally significant. For payment firms already operating in Kenya, this MoU lowers the barrier to Rwanda market entry to a compliance filing rather than a multi-year licensing campaign. For Rwanda-based fintechs, access to Kenya’s 55 million mobile money users is a transformational commercial opportunity. The CBK-NBR deal is modest in scope today but its architecture, mutual recognition plus preserved oversight, is the correct one for scaling to a continent-wide framework under AfCFTA’s digital trade provisions.
Source: Business Today Kenya
