Kenya proposes up to KES 250 million capital threshold for payment firms

Kenya is considering new minimum core capital requirements for payment companies under the Draft National Payment System Bill, 2026, with proposed thresholds ranging from KES 5 million ($38,610) to KES 250 million ($1.93 million).

The proposed rules, attributed to the Central Bank of Kenya and the draft legislation, would link capital requirements to the type of payment service or system operated. Basic data services would carry the lowest proposed threshold, while electronic money issuers would need at least KES 250 million in core capital.

One-year transition period proposed

Existing payment providers would have one year from the bill’s enactment to meet the new capital requirements, subject to guidelines issued by the Central Bank of Kenya. The proposal has not yet been enacted, and the supplied information does not indicate whether it will be amended before becoming law.

The bill would require licensees to maintain the prescribed minimum core capital at all times. Core capital would consist of fully paid-up ordinary share capital and disclosed reserves.

Several forms of financing would not qualify. The draft excludes shareholder loans or advances, capital raised through borrowed funds, revaluation reserves and internally generated intangible assets from paid-up capital. This could make compliance more difficult for early-stage and bootstrapped fintechs that depend on borrowed or shareholder funding.

Higher requirement for multiple licences

Payment companies operating under more than one licence category would be required to hold the full capital amount for their highest-capital category, plus 50% of the prescribed requirement for each additional category.

Under that formula, an entity operating as both an Electronic Money Issuer and an Electronic Wallet Provider would need KES 275 million ($2.12 million) in core capital.

The proposed structure could raise the cost of entering Kenya’s payments market. Established commercial banks may have an advantage because they would receive simplified central bank authorisation and already hold reserves, according to the assessment of the proposal.

Sandbox for payment products

Alongside the capital rules, the draft bill proposes a regulatory sandbox. The arrangement would allow firms to live-test new payment products without first obtaining a full licence or raising upfront capital.

Commercial banks, microfinance institutions and state-owned enterprises would not need a full payment licence if they obtain CBK authorisation and meet applicable capital adequacy requirements.

The proposed thresholds and licensing provisions form part of Kenya’s Draft National Payment System Bill, 2026. The final requirements will depend on the bill’s enactment and any subsequent regulatory guidance.