A new fintech licensing framework between Rwanda and Kenya is expected to transform the landscape of cross-border business growth, which has traditionally been hampered by high operational costs.
For fintech companies and payment service providers, expanding across multiple African markets has often meant repeating the same licensing and compliance processes in every country, a costly and time-consuming challenge.
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The fintech licensing passport system signed at the just-concluded Inclusive FinTech Forum 2026 builds on Rwanda’s similar agreement with Ghana.
It allows a company licensed in one country to operate in another without undergoing a full licensing process again.
Experts say this could make it easier for small fintechs to scale across borders, reduce operational costs, and accelerate the growth of cross-border digital payments.
Norbert Haguma, Country Manager at NALA Payments and Chairman of the Rwanda Blockchain Association, explained that before this agreement, fintech firms operating in Rwanda and Kenya faced regulatory barriers.
Each country required separate licensing, and even small differences in documentation could create complications.
"Maybe in one country you require 10 documents, in another they require 11. The main issue for African fintechs is that if you have to get a license in every market, it often means depositing a lot of money, because these regulations are designed to protect customers,” he said.
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Haguma added that licensing fees vary by country depending on the type of license.
A payment service provider license, may cost between $70,000 and $700,000. Multiply that across multiple countries, and the barrier to entry becomes extremely high, making regional expansion difficult for small businesses and startups, he added.
"This is why the fintech passporting agreement is such a big deal. A Rwandan fintech gets a license in Rwanda and can operate in other countries. If it's a Ghanaian fintech gets a license in Ghana and can operate in others.
"It doesn’t reduce the compliance requirements. You still have to provide all the necessary documents, but because you’ve gone through testing in one country, it should be accepted more easily in another. Central banks can work together to harmonise requirements.”
Haguma said that harmonising licensing also supports greater intra-African trade by making cross-border payments easier.
Adebimpe Talabi, Operations Manager at the Kenya-based Africa Fintech Network (AFN), said companies often face the challenge of obtaining separate licences in every country they enter, a process that significantly increases costs, complexity, and time to market.
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"In some cases, licensing processes can take several months and require substantial capital thresholds, which limits innovation and regional scaling,” Talabi said.
"The concept is straightforward: if a fintech is properly licensed and supervised in one jurisdiction, it should be able to operate in another participating jurisdiction through a simplified approval process, rather than starting the licensing process from scratch.”
Talabi noted that if this approach is replicated across regional blocs and eventually aligned with the African Continental Free Trade Area (AfCFTA), these agreements could greatly accelerate digital financial integration across the continent.
Leon Kanamugire, a fintech ecosystem expert, said with these licencing frameworks, Rwanda can solve one of its key challenges: a small domestic market. He noted for fintechs starting in the country and looking to scaling up, the local market alone is often limited.
"Now, with this framework, a fintech licensed in Rwanda can operate in Kenya and also integrate with Ghanaian fintechs, which brings more investment and removes the limitation of consumers,” Kanamugire said.
According to him, fintech products were previously limited to local markets, but now companies in Rwanda can offer cross-border services, such as paying employees in Kenya or converting Kenyan shillings to Rwandan francs.
On implementation, Kanamugire noted that Ghanaian companies have already begun using Rwanda’s sandbox framework to test license passporting.
"Once the framework is established with these fintechs, Kenyan fintechs can also participate in the sandbox, and operations can continue from there.”