Kenya Proposes Capital Rules of Up to $1.93 Million for Payment Firms

Kenya has proposed new minimum core-capital requirements for payment companies under the Draft National Payment System Bill, 2026.

The proposed thresholds would range from KES 5 million ($38,610) for basic data services to KES 250 million ($1.93 million) for electronic money issuers. The dollar equivalents are based on an exchange rate of KES 129.49 to the US dollar.

The measures remain proposals and the bill has not been identified as enacted. If approved, existing payment providers would have one year from enactment to meet the new requirements, subject to guidelines issued by the Central Bank of Kenya.

Capital requirements and exclusions

The draft legislation would define core capital as fully paid-up ordinary share capital and disclosed reserves. It would also exclude several forms of funding and reserves from qualifying capital.

These exclusions would include shareholder loans or advances, borrowed funds, unpaid or partly paid capital commitments, revaluation reserves and internally generated intangible assets. The source material also identifies convertible debt among the forms of funding that would not qualify as core or paid-up capital.

Entities operating under more than one licence category would be required to hold the full capital requirement for the category with the highest threshold, plus 50% of the prescribed minimum capital for each additional category. The proposed core-capital requirement for a firm operating as both an Electronic Money Issuer and an Electronic Wallet Provider is KES 275 million ($2.12 million).

The draft bill states that each licence would be subject to a condition requiring the licensee to maintain the applicable minimum core capital at all times.

Potential impact on fintechs

The proposed rules could increase the cost of entering Kenya’s payments market, particularly for early-stage and bootstrapped fintech companies, according to the assessment in the source material.

Established commercial banks could have an advantage under the proposed framework because they would benefit from simplified central bank authorisations and existing reserves. The proposal also covers microfinance institutions and state-owned enterprises.

Commercial banks, microfinance institutions and state-owned enterprises would require Central Bank of Kenya authorisation rather than a full payment licence, provided they meet capital adequacy requirements.

Proposed regulatory sandbox

Alongside the capital rules, the bill would establish a regulatory sandbox for firms developing new payment products. The proposed arrangement would allow companies to test products in a live environment without first obtaining a full licence or raising upfront capital.

The sandbox is intended to provide a route for testing new services, while the proposed capital requirements would set financial conditions for licensed payment companies. The timing and outcome of the bill’s enactment have not been specified.