FINTECH REGULATION IN KENYA: GLOBAL PRACTISES AND LESSONS LEARNT

Abstract

This paper purposed to review the regulatory regime guiding fintech in Kenya and document lessons from countries that have made considerable strides in fintech regulation at global and regional levels. Rapid innovations in fintech is a cause to remain alert and requires an agile regulatory framework to keep up with the ever-evolving products and services, harness the opportunities, and mitigate against threats that arise. Considering the rapid growth in fintech across the world, some regimes have made milestones in regulation. Documenting and drawing evidence-based lessons from such will be useful in strengthening the current regulatory framework in Kenya and for peer learning purposes. The study employs a qualitative method and establishes the need for multi-sectoral approach to regulation. The case studies offer regulatory lessons in form of regulatory led sandboxes; creation of fintech hub/office; establishment of specific fintech regulatory units (departments) within the ranks of the regulator; coordinated approach to policy making through state and private sector collaboration; regulatory support of new fintech entrants or startups; supportive fintech policy regime; other forms of sandboxes at state or private level. The study also emphasizes on the need for regulatory balance between innovation, integrity of financial markets and consumer protection. The role of research institutions and universities is appreciated in conducting research on fintech.