The Central Bank of Kenya (CBK) and the National Bank of Rwanda (BNR) have signed a memorandum of understanding (MoU) aimed at simplifying licensing requirements and expanding cross-border payment services between the two countries.
The agreement was formalised during the Inclusive FinTech Forum held in Kigali, bringing together regulators and stakeholders from the financial technology sector.
Under the new arrangement, both central banks have proposed a “passporting” framework that would allow payment service providers licensed in one country to operate in the other without undergoing separate and duplicative licensing processes, provided they meet agreed regulatory standards. The framework is intended to align supervisory requirements while maintaining oversight and compliance obligations in both jurisdictions.
Officials said the initiative is designed to reduce regulatory fragmentation, improve operational efficiency, and lower compliance costs for fintech companies seeking to expand within the region. By easing market entry barriers, the agreement is expected to support innovation and encourage greater participation by digital financial service providers in cross-border transactions.
The regulators noted that differences in licensing procedures have historically created additional administrative burdens for companies operating across multiple African markets. The passporting model is aimed at addressing these challenges by creating a more coordinated regulatory environment.
The agreement also forms part of broader regional integration efforts under the East African Community (EAC) cross-border payments master plan. The plan seeks to enhance interoperability between payment systems across member states, strengthen financial linkages, and improve the efficiency of regional money transfers.
Authorities stated that improved interoperability between payment infrastructures would help facilitate faster settlement processes, reduce transaction costs, and enhance transparency in cross-border financial flows. The initiative is also expected to support increased trade, investment, and economic cooperation between participating countries.
Fintech expansion has continued to accelerate across East Africa, driven by mobile money adoption, digital banking services, and growing demand for efficient payment solutions. Regulators in the region have increasingly focused on balancing innovation with consumer protection, financial stability, and anti-money laundering compliance.
The CBK and BNR emphasised that the agreement reflects their commitment to strengthening regulatory collaboration while maintaining sound oversight frameworks. Both institutions indicated that continued engagement will be necessary to finalise technical details and implementation mechanisms for the passporting system.
Industry observers say the move could serve as a model for deeper regulatory coordination across the continent, particularly in regions seeking to harmonise digital financial services frameworks. If successfully implemented, the framework may encourage fintech companies to scale operations across borders with greater ease, contributing to the growth of Africa’s digital economy.
The agreement underscores the growing emphasis on regional cooperation in financial regulation as governments seek to modernise payment systems and expand access to digital financial services. Officials described the partnership as a step toward enhancing efficiency, strengthening integration, and supporting the development of a more connected cross-border payments ecosystem in East Africa.
