What license passporting to Ghana means for Rwandan fintechs

A new agreement between Rwanda and Ghana that allows fintech license passporting is set to drive growth for Rwandan innovators by expanding their solutions to a larger market and enhancing knowledge-sharing. ALSO READ: How the ease of licensing process could boost Fintechs penetration in Africa Last week, both countries launched a new cross-border payment infrastructure dubbed ‘Africa’s Next-Gen Digital Payment Infrastructure’ which among others, features a license passporting and data exchange framework for the growth of fintech industry on the continent. A fintech license passporting system allows fintech companies to operate in multiple countries with fewer regulatory hurdles. The system is intended to make it easier for fintech companies to scale across Africa. This means that fintech companies with a valid license in one country can get authorization to operate in another country by only submitting supplementary documentation, reducing time, costs, and administrative burdens, hence, allowing scale-up. Speaking at the launch of the framework, Johnson Asiama, the Governor of Bank of Ghana, said that this is a milestone towards an integrated African capital market with prospects of enhancing the livelihoods of people and creates opportunities of entrepreneurs, especially SMEs. ALSO READ: Rwanda, Ghana launch new cross-border payment infrastructure As implementation details are yet to be released, stakeholders are upbeat about the opportunities presented with this new regulatory framework. Ernest Kayinamura, Chairperson of the Fintech Association of Rwanda, said this agreement demonstrates the power of collaboration and political will, rather than a technological challenge. “License passporting is a very critical step to have fintechs expand and grow. Currently, it is an isolated process to get a license in every market you enter which is very time consuming and costly.” He said that with the common objectives and increasingly standardized onboarding process, it is ideal to share that information when a fintech goes to another jurisdiction. ALSO READ: Rwanda launches National Fintech Strategy to drive growth and innovation Rwanda’s fintech industry is nascent but growing with currently 76 companies engaged in lending, saving, insurance, payments, among others. The country targets to have 300 fintechs by 2029, according to the National Fintech Strategy which is expected to rake in $200 million in investments throughout the implementation. “Fintechs are growing. We are developing solutions, testing, conducting research and development. We just need the right environment and financing to support us reach the next level.” Former Governor of the National Bank of Rwanda who officiated the agreement signing, John Rwangombwa, said: “As stewards of the financial system, we must remain steadfast in our mission to break down barriers, empower businesses, and create inclusive opportunities for all. Through initiatives like this, we are shaping the future of Africa’s financial landscape,” According to Bobson Rugambwa, CEO of Mvend Ltd, a financial tech company, this initiative should be expanded to other markets to ease the growth of this industry, especially in the East African region because of the existing mutual trust between central banks. He added that this should be coupled with addressing the challenge of data infrastructure, whereby one central bank would have to give another the guarantee that in the event that they need access to any data for legitimate purposes, the license issuer would compel the innovator to comply with data sharing. This would remove the need to set up data centers in every country of operation. He asserted that Rwandan fintechs have the capacity to scale up in other markets given that there is proven concept in the local market and most of the solutions developed can solve similar problems in other markets. “We still need to facilitate cross border payments,” he added, “if you look at any part of African borders, there is much trade going on between Rwanda and DR Congo, Uganda, Tanzania, and beyond, and all that trade still has manual payments that can be digitized,” he explained. When it comes to attracting finance, Rugambwa highlighted that this development which will facilitate scale-up will allow innovators to attract investments by showcasing not only the solutions viability but also a bigger market to tap into by expansion without the challenge of licensing. Crepin Kayisire, Founder of Kayko, reiterate the development in the regulatory landscape to allow Rwandan fintechs to scale up and grow in other markets, strengthening existing ties with Ghana and its people. He said that his company aims to start expansion to other markets in 2026, given that it is currently undergoing growth in terms of providing solutions for small businesses beyond bookkeeping to including tax compliance and payments. When asked what license passporting would mean to completion, Kayisire noted that Rwanda as a country would benefit from addition of new solutions and businesses, driving costs and prices down, however, from an innovator’s perspective, he said that it is a chance to integrate with new solutions that are advanced. “It would even allow us who have been building solutions and gained traction to partner up with other startups that have funding that would like to leverage our status and achievements,” he said. Kayisire added that another pressing issue that regulators should address to advance the sector is to incentivize the financial sector to work with fintechs in an efficient manner. In 2022, the National Bank of Rwanda launched a revised regulatory sandbox – an enabling regulatory environment that allows innovative financial services and products to be tested and deployed in a live environment with real customers within a period of 12 months. According to Talkmore Chidede, Senior Digital Trade Expert at AfCFTA Secretariat, Ghana and Rwanda are leading the way in implementing the AfCFTA Protocol on Digital Trade. The protocol has an annex on Financial Technology which requires State Parties to introduce license passporting of financial technology enterprises to provide digital payments or financial services across multiple State Parties with a view to streamline cross-border Fintech operations and reduce regulatory bottlenecks across Africa.

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What license passporting to Ghana means for Rwandan fintechs