How will policy and regulatory initiatives spur more fintech innovation in Kenya?

  • Posted by: Site Administrator
  • Category: Blog

In Africa, Kenya is ranked among the highest for the growth of financial inclusion because of the rapid growth of fintech innovations. Financial technology is advancing at a rapid pace which means that regulators and policy makers are finding it hard to maintain the balance between encouraging innovation growth and protecting the consumers.

The Capital Markets Authority (CMA) partnered with FSD to engage Open Capital Advisors to analyze the fintech market in Kenya and examine cases on how regulations could increase innovation. It is important to note that regulations are meant to act as the main catalyst for promoting fintech innovation.

Scaling business models is one of the challenges fintech companies are facing as they launch new innovations. Research shows that fintechs in Kenya face issues like inadequate access to capital, lack of specialized talent, and lack of proper regulation that would guide them in the industry. As a result, this has hindered their scale.


According to the Fintech stakeholders, regulators have struggled to keeup up with new business models and innovations and this has resulted in longer approval processes and unspecified requirements when applying for compliance. Today, Fintech innovators don’t have a regulatory body that clarify their actions and this brings uncertainty in terms of availability of regulations which then discourages investment in Kenya’s fintech market.

However, the Capital Markets Authority (CMA) has identified these regulatory challenges and has introduces fintech’s firsr regulatory sandbox. This will help regulators gain more insight on new innovations which will enable them to test products and services in live environments. This will reduce the risks that consumers may face from the new financial services and products