Policy & Regulations - Afrikan Heroes

Chipper Cash Gets New License In Uganda To Trade In Foreign Stocks, Launches App

November 12, 2021

At a time when Nigeria is still undecided about allowing local startups to run platforms that enable local investors to invest in foreign stocks, the Capital Markets Authority of Uganda has licensed African payments company Chipper Cash to run one such platform. The startup has, accordingly, also launched a product to that effect.

Chipper’s Global Stocks Investing product allows Ugandans (both young and elderly) to invest in publicly traded global firms including as Facebook, Amazon, Tesla, Netflix, and others. Chipper Cash is Uganda’s first company to offer fractional stock ownership. The new kid on the block, fractional shares, are critical for making stock investing easier and more accessible, especially for African countries with lower-valued currencies.

“Today, we’re launching a revolutionary product, U.S. fractional stocks,” said Ham Serunjogi, CO-founder and CEO of Chipper Cash. “This product is probably our most impactful product since the launch of the original Chipper app just three years ago.”

“For the first time ever, Ugandans of all economic backgrounds will be able to invest as little as $1 or 3,500 Uganda Shillings in the world’s largest public companies listed on the New York Stock Exchange — when we talk about unlocking global opportunities, this what we mean. As a proud Ugandan, it means so much to me that we get to launch a product that will empower my fellow countrymen and women,” he said.

Here Is What You Need To Know

Chipper Cash, in collaboration with DriveWealth LLC, a pioneer in fractional investing and embedded finance, enables the average Ugandan to generate long-term wealth by providing safe and affordable access to the US stock markets.

Investing in US equities previously required large minimums and was exclusively available to high-net-worth individuals. This effectively priced first-time investors out of the market.

Chipper Cash allows users to invest in over 6,000 U.S. equities and ETFs on a dollar equivalent basis (i.e. fractional shares) with minimal or no minimum requirements.

“Wealth creation is one of the most powerful ways of driving economic and social development in any country. For too long, many tools that offer the ability to generate and store wealth have remained inaccessible for too many, for too long. This product, the Chipper fractional stocks product, fixes precisely that problem,” says Ham.

A Look At What Chipper Cash Does

Founded in 2018 by Ugandan Ham Serunjogi and Ghanaian Maijid Moujaled, (two college students brought together by their academic adventures at Grinnell College, Iowa, USA) Chipper Cash provides free, interoperable payments in and between Ghana, Kenya, Uganda, Tanzania, South Africa, Rwanda, and Nigeria.

It accomplishes this by allowing customers to link their mobile money accounts (regardless of provider) to Chipper and make P2P transfers via its simple smartphone application.

Chipper foreign stocks Uganda Chipper foreign stocks Uganda

4 Months After Raising $13.8m, African Startup Chipper Cash Secures Another $30m, Backed By World Richest Man Bezos

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning write

Inside The New Payment Service Bank Licenses Given To MTN, Airtel And 9mobile In Nigeria And How They Will Work

November 8, 2021

Nigeria’s largest telco by subscriber base MTN, and its immediate competitor Airtel have taken up a new business — that of attempting to beat Nigerian banks at what they know how best to do. The two have been granted one of the country’s most expensive fintech licenses, a payment service bank license, costing over $12.8m in licensing fees. Last year, 9mobile, another of the country’s leading telco, became one of the first set of licensees, alongside Hope PSB and Moneymaster PSB.

The payment service bank license is one of the many types of banking licenses a financial technology company in Nigeria seeking authorisation to operate from the country’s central bank may explore. It is different from other existing banking licenses for financial technology companies because it is one of the few types of fintech licenses that allow the licensee to operate across the country. A majority of others have geographical and structural limitations.

Nigeria’s central bank in its latest update on the payment service bank licensing rules is clear about what purpose this type of bank would serve.

“PSBs are envisioned to facilitate high-volume low-value transactions in remittance services, micro-savings and withdrawal services in a secured technology-driven environment to further deepen financial inclusion and help in attaining the policy objective of 20 per cent exclusion rate by 2020,” CBN said it in its latest rules.

But it appears that MTN and Airtel strategically delayed their license applications for the PSB license for a reason: the recently introduced mobile money licensing framework. While all hopes were high that the mobile money operational guidlines would be wider in scope, these hopes were dampened with the eventual release of the guidelines in July this year.

The mobile money guidelines heavily limited the operational capabilities of its licensees, restricting mobile telecoms operators such as MTN and others, for instance, from carrying out substantial banking activities using the model.

A clearer picture about the differences between Nigeria’s payment service bank and mobile money licenses is painted in the table below. The differences also capture how the payment service bank design will function in practice.

S/N	KEY REGULATORY REQUIREMENTS	PAYMENT SERVICE BANK LICENSE	MOBILE MONEY LICENSE

1	Can accept and hold deposits	YES	YES (mostly via mobile wallets)
2	Cross-border Remittance	YES ( including, inbound cross-border personal remittances)	NOT Specifically stated. (Operationally improbable)
3	Deal in foreign exchange transactions	YES (only to the extent of sale of foreign currencies realized from inbound cross-border personal remittances to authorized foreign exchange dealers)	YES (only to the extent of sale of foreign currencies realized from inbound cross-border personal remittances to authorized foreign exchange dealers)
4	Issue cards	YES	YES
5	Lending	NO	NO
6	ATM	YES	NOT Specifically stated (Operationally improbable)
7	Extent of participation allowed to telecommunications companies.	ALLOWED (through their subsidiaries) to accept deposits from the members of the public.	RESTRICTED from accepting payments from the public, apart from airtime billing.
8	Estimates of licensing fees	Over 5 billion naira ($12m)	Over 2 billion naira ($5m)
9	Geographical limitations	NATIONAL (provided that not less than 25% financial service touch points in rural areas are set up)	NATIONAL
10	Use of network of agents permitted	YES	YES
11	Who may obtain the license?	i) Banking Agents; ii. Telecommunications companies (Telcos), through subsidiaries; 8 Classified as Confidential iii. Retail chains (supermarkets, downstream petroleum marketing companies); iv. Postal services providers and courier companies; v. Mobile Money Operators (MMOs that desire to convert to Payment Service Banks shall comply with the requirement of this Guideline); vi. Switching Companies; vii. Financial technology companies (Fintech); viii. Financial Holding Companies; and ix. Any other entity on the merit of its application subject to the approval of the CBN	Banks and corporate organisations
12	Primary Regulator	Central Bank of Nigeria	i) Central Bank of Nigeria ii) Nigerian Communications Commission

What Difference Will A Payment Service Bank License, Therefore, Make?

A Payment Service Bank (PSB) is a new category of bank with smaller scale operations and the absence of credit risk and foreign exchange operations. In addition to accounts (current and savings), PSBs can also offer payments and remittance services, issue debit and prepaid cards, deploy ATMs and other technology-enabled banking services. Think of them as basically stripped-down versions of traditional deposit money banks, with limited functionality and a focus on onboarding more of the excluded and marginalised population.

Under Nigerian central bank’s regulations, subsidiaries of mobile network operators (aka telcos), mobile money operators, retail chains (supermarkets) and banking agents are welcome to apply for the PSB license, provided they can meet certain requirements, including a 5 billion naira ($12million) capital base, and a combined 2.5 million naira ($6.4k) application and license fee (which are non-refundable).

The new banking licenses for Nigeria’s leading telcos are coming after the CBN issued an updated and revised guideline for the licensing and regulation of Payment Service Banks in Nigeria on August 27, 2020.

MTN has the largest chunk of the Nigerian telco market with over 74 million subscribers, followed by India’s Airtel with over 52 million users; locally owned Glo at 52 million; and then 9mobile with a meager 12 million users. Visaphone (which is merely an extension of MTN, having being acquired by the telecom giant in 2015 to boost its 4G capacity) comes last with just a little over 137, 000 users.

How payment service bank Nigeria How payment service bank Nigeria

Nigerian Telco 9Mobile Turns To Banking With The Country’s First Ever Payment Service License

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning write

Egypt Becomes Africa’s First Country To Approve SPAC Rules For Startups

November 2, 2021

The Egyptian Financial Regulatory Authority, in a bid to provide multiple funding options to startups in Egypt and after reviewing many international practices, has approved the establishment and licensing of companies for the sole purpose of acquisition — also known as SPAC. The Board of Directors of the the Auithority reasoned that SPACs are gradually becoming a preferred exit route for founders and major shareholders in startups in developed economies.

Mohammed Omran, Chairman of the Financial Supervisory Authority, said the board’s decision reflects a desire to develop financing solutions that will make it easier for investors, particularly small and medium-sized businesses, to access capital, in order to support Egypt’s Vision 2030, which aims to empower and expand the private sector, and that the Authority’s initiative will provide an opportunity for startups and promising businesses on the one hand, and for established businesses on the other.

According to the new SPAC guidelines which is subject to the provisions of the country’s Capital Market Act №95 of 1992, the acquisition proceeds will be deposited in fixed-income savings pools until the transaction is completed. The SPAC will be dissolved and the funds will be returned to shareholders if an acquisition transaction is not completed within two years.

The new rules will open up new chances for startups with tremendous growth potential to expand through the capital market, raise their business volume, and contribute more to Egypt’s economic growth.

Swvl, an Egyptian ride-sharing startup based in Dubai, recently announced that it was going public through a merger with a special purpose acquisition company (SPAC). According to The Wall Street Journal, the mobility company is merging with Queen’s Gambit Growth Capital, a SPAC founded by a group of female CEOs early this year (which claims to be the first women-led SPAC). Victoria Grace, the company’s CEO, is the founder of Colle Capital, a venture capital firm based in New York.

Swvl will be the second Middle Eastern business to go public using the SPAC route. Anghami, an Abu Dhabi-based music streaming platform, stated earlier this year that it intended to go public by merging with Vistas Media Acquisition Company, a SPAC.

A SPAC, sometimes known as a blank-cheque company, is founded to obtain funds through an IPO in order to purchase and publicize an existing company. It will be the first Egyptian-born technology company to list on NASDAQ (or outside Egypt), as well as the second Egyptian technology company overall (Fawry being the first one).

According to the report, Queen’s Gambit Growth Capital raised $300 million when it was founded in January and another $45 million afterwards through underwriters’ overallotment option. Swvl’s purchase will also involve a $100 million PIPE (private investment in a public firm) from a consortium of investors including Agility, Luxor Capital, and Zain Group. Swvl will now have $445 million in additional capital to invest in its growth and expansion.

SPAC Rules Egypt SPAC Rules Egypt

With Fawry’s Unicorn Status, Does Egypt’s Stock Exchange Hold The Unicorn Wand For Tech Startups In Egypt?

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning write

Central Bank Of Kenya Revokes License Of Fintech Startup Tangaza Pesa

October 27, 2021

The Central Bank of Kenya (CBK) has stated that Mobile Pay Limited (MPL), whose service brand name is Tangaza Pesa, has had its license withdrawn due to regulatory violations. According to CBK, the firm failed to file compliance reports, including audited financial reports, as required by the financial regulator on multiple occasions.

“This action culminates a long engagement between CBK and MPL, during which CBK has considered MPL’s continued violations of NPS (National Payments System) law and regulations,” said CBK in a statement.
Read also NMB Bank Launches New Seed Fund For Sandbox Fintech Startups In Tanzania

“MPL has persistently failed to discharge its statutory obligations, among others, non-submission of audited annual Financial Accounts of the Trust Fund (Tangaza Trust) and MPL, non-submission of annual systems security audit report, and non-submission of quarterly reports for CBK’s oversight.”

Here Is What You Need To Know

While the firm was given enough time to address its violations, the banking regulator said its compliance has continued to “deteriorate,” putting customer funds at risk. The amount of money at risk was not disclosed by CBK.

The regulator, on the other hand, stated that MPL’s and its Trustees’ actions could jeopardize public trust, and that revoking MPL’s authorization as a Payments Service Provider will protect its customers’ interests and maintain public confidence in the National Payment System.

“CBK has taken over control of the business of MPL to safeguard and facilitate distribution of the money in the Trust Fund,” it said.
Read also Nigerian Retail-Tech Startup Alerzo Acquires Payments Platform to Boost Growth

“CBK will undertake a reconciliation of MPL customers’ balances against the Trust Fund accounts, and then commence reimbursing the customers.”

A Look At What Tangaza Does

Founded in 2011 by Oscar Ikinu, who also doubles as the managing director, CBK said MPL is the smallest of Kenya’s four mobile payments service providers, with less than 0.01 percent of total mobile money subscribers. The firm’s website reportedly fell offline shortly after the regulator’s notice.

“While we continue with mobile money services as our core business, our customers will also access voice, data, and SMS services,”Mr Ikinu was cited as stating (CA) when the Communication Authority gave the company a mobile virtual network operators (MVNOs) license.

Tangaza central bank kenya Tangaza central bank kenya

New Regulations In Kenya Now Require All Investment Funds To Be Registered With Capital Markets Authority

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning write

Senegal Assents To Implementation Of Startup Act, One Year After

October 24, 2021

Macky Sall, the president of Senegal, has ratified a bill authorizing the execution of the Senegalese Startup Act, which governs the development and promotion of startups in the West African country.

With this ratification, the Startup Act would now take full legal effects.

Last year, the Startup Act was promulgated after the Senegalese National Assembly passed Law No. 2020/01, relating to the creation and promotion of startups, after a protracted period of deliberation.

The Senegalese Startup Act among other things, seeks to promote innovation in the country’s economy towards achieving the country’s “Digital Senegal 2025” strategy.

Below are key provisions of the Startup Act:

Startups Covered By The Law

The Act targets startups in Senegal that use creativity, innovation, new technologies to achieve high added value for both the Senegalese and the international markets. To qualify to benefit from the Startup Act, the startup must:

a) Be an innovative and disruptive private or public company, which has been legally registered for a period of not more than 8 years, and which has strong growth potential built on a disruptive economic model.

b) Created on the Senegalese territory and must at least, be one-third (1/3) owned by persons of Senegalese nationality or persons resident in Senegal or by legal persons having or doing business in Senegal.

b) The law also applies to any startup created by any Senegalese living abroad
who owns at least 50% of the startup.

Creation of A National Commission Dedicated To Startups

The Act creates an Evaluation, Support and Coordination Commission, which is inclusive of all public and private stakeholders in Senegal, and which is geared towards the development of startups.

The Commission is mandated to set up a platform dedicated to startups.

The online platform will allow any startup to complete the related formalities towards its registration and labeling. The platform will also facilitate access to information by startups.

The law also allows the Commission to get support from both the public or private sectors towards assisting the creation, promotion and development of startups.

Consequently, the law gives the Commission the power to register and issue registration certificate to any startup which meets criteria for a startup stated above for purposes of obtaining such support and assistance from the private and public sectors.

It also gives the Commission the power to stipulate the technical standards which a startup must meet before it is issued with a startup label. It is also tasked with the responsibilities of fixing procedures for labeling,evaluation, renewal or withdrawal of the label from startups.

Read also: Senegal Approves A-Three Year Tax Exemption For Its Startups

Incentives and Benefits for Startups Under the New Law

The law also states that any registered or labeled startup benefits from incentives, according to conditions stated by the law.

Consequently all the startup wishing to benefit from the reserved advantages and incentives need to do is to comply with the provisions of this law — which is to say, to embark on a simplified registration and labeling procedures implemented by the Commission described above.

Particularly, the incentives will relate to:

The granting of customs and social advantages according to conditions to be defined taking account of the Labor Code and the General Customs Code available in Senegal.

Tax measures according to conditions to be defined taking into account the General Tax Code — to this effect, the Senegalese government has approved a three year tax exemption for its startups and newly created companies. According to a memorandum dated February 24, 2020 issued by the country’s Ministry of Finance and Budget, the Finance law of December 20, 2019, which came fully into force throughout the country on December 28, 2019 has brought to an end the regime of taxation of the country’s startups and SMEs.

The legally registered startup will further benefit from special tax advantages such as provided for in the General Tax Code in Senegal. It will also benefit from other measures and schemes more favorable to them in accordance with the laws and regulations in force.

The granting of guarantees to startups with a view to obtaining credit ;

Direct granting of public or private funding to registered startups;

The implementation of measures favorable to investment for their benefits;

Facilitating access to public procurement for startups under conditions to be defined in taking into account the Public Procurement Code in Senegal;

The implementation of support, facilitation and development measures the startup;

The implementation of capacity building measures for the startup.

Commission is also mandated to set up training and empowerment platform reserved only for startups registered with it. The platform will, among other things, allow access to a database and a list of experts, trainers and mentors who support startups towards upgrading their knowledge on various issues such as finance, marketing, communication, and development of business plans.

Additionally, startups legally registered with the Commission, under the new Senegal ‘s Startup Act may receive support from the Senegalese government with the aim of:

Subsidizing its registration cost;

Reserving the .sn domain name;

Ensuring the protection of startup innovations with national organizations and international intellectual property protection;

Facilitating support from approved incubators for the startup;

Supporting the startup’s research and development activities;

Covering any other support necessary during the growth stage of the
startup.

Access To Funding For Startups Under The Act

Under the Act, labelled startups will benefit from public and private funds in or outside of Senegal, mainly intended to directly finance eligible startups.
The public sector support will also guarantee :

(within the limit of a ceiling fixed by law) loans, financing and participation in the capital of startups, granted or made by investment companies, whatever their form, and any other investment organizations according to the legislation in force in Senegal;

Loans made to startups by credit and other institutions;

The execution of contracts.

3. Under the law, labeled startup will also benefit from a preferential regime for access to Public Procurement Order.

Consequently, throughout the label’s validity period:

A preference margin of 5% is granted to any labeled startup that participates in a call for competition relating to public contracts, public service delegations and partnership contracts. This percentage can be combined with any other advantage granted to other candidates by applicable regulations. However, the cumulative preference cannot exceed 25%.

The applicant for a public contract, a delegation of public service or a contract partnership which agrees to subcontract 30% of the services covered by the contract to one or more several labeled startups or that present an offer in grouping with one or several startups, can benefit from a preference margin of 5%. This margin of preference can be combined with any other margin provided for by the regulations in force.

In the event of a collaboration with another company which is not a labeled startup, the margin of preference provided for in the preceding paragraph of this article is not applicable.

As part of the implementation of public private partnership contracts between a contracting authority and a labeled startup, the candidate’s status is taken into account within the framework of the application of the provisions relating to the spontaneous offer.

The procedures for applying and monitoring the benefits and incentives for promoting startups’ access to public procurement are set by the Commission.

Penalty for Non-Complying Startups

Finally, under the Startup Act, the label given to a startup may be withdrawn from it when it no longer meets the eligibility criteria. The withdrawal of the label results in the loss of all the advantages linked to the status of labeled startup. The procedures and procedures for withdrawal are specified by the technical standards defined by the Commission.

A legally registered or labeled startup in a situation of irregularity may however request its regularization by the Commission by complying with the standards set by the Commission.

Startup Act Senegal

Who Are The Investors In Francophone African Startups And How Do They Invest?

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

Huge Respite For Digital Lenders In Kenya Over New Licensing And Minimum Capital Rules

October 16, 2021

The National Assembly in Kenya has passed the 2021 Central Bank of Kenya (Amendment) Bill and its provisions now require President Uhuru Kenyatta’s signature before becoming law. Under the passed bill, digital lenders will not be bound to minimum capital and liquidity criteria.

However, Bank of Kenya (CBK) has been given authority to oversee the contentious creditors under bill.

While the CBK will not impose any capital or liquidity requirements on lenders, the reserve bank has been given substantive powers to intervene in the unregulated industry, which Governor Dr. Patrick Njoroge has compared to the Wild West.

“One is minding their own business only to get a call from deep from their rural area on why they have not paid their loan. Imagine if we called your boss to say you owe us serious money only for the debt to turn out to be Ksh.2000. What would happen?” Dr. Njoroge asked in a previous news conference.
Read also Kenyan Startup Invests in Ivorian Logistics Startup Kamtar

“These (digital lenders) are little fleas. Their output in terms of credit is less than 0.14 percent, that’s less than the smallest bank around but in terms of noise and pain to Kenyans they are at 90 percent.”

Here Is What You Need To Know

Other last-minute changes to the bill will require digital lenders to submit key documents when applying for CBK licensing, including a certificate of incorporation under the Companies Act, memorandum and articles of association, and a statement of compliance with the Consumer Protection Act’s provisions.

From the date the CBK publishes the necessary regulations, players in the digital lending market will have six months to apply for licence.

By passing the amendment bill, Parliament has given the CBK the authority to proverbially bell the cat, with the banking sector regulator looking to bring order to an industry that has been accused of a variety of wrongdoings, including charging borrowers exorbitant interest rates and using crude and deceptive debt collection tactics.

CBK Governor Patrick Njoroge has remained outspoken about the alleged wrongdoings, claiming that the digital lenders are a burden on not only Kenyans but also the economy.

The CBK will be able to set limitations for interest rates charged by digital lenders, and the reserve bank will have the authority to cancel licenses from players that violate the Data Protection or Consumer Protection Act’s criteria.

Meanwhile, after being kicked out of the credit information sharing (CIS) system last year by CBK, digital lenders will be able to list creditors with Credit Reference Bureaus (CRBs).

The Implications Of The Proposed Law On Digital Financial Services Startups In Kenya

Implied Lifting Of The Ban On Credit Lending Startups

Once the new law is assented to, its first implication would be to terminate the ban on credit lending startups in Kenya as regards submitting credit information on their borrowers to Credit Reference Bureaus (CRBs). Thus, with a renewed power to report customers for blacklisting to the country’s central credit information sharing center, it is only safe to say that the risks associated with their business model have become, once again, more manageable.

Licensing of Digital Financial Services Companies/Startups

Another direct implication of the proposed new law on digital financial services startups in Kenya is that the Central Bank of Kenya will now possess recognized power under the law to issue operational licenses to startups desiring to provide services related to a digital financial product, financial product advice, market, administrative or management services or credit under a regulated credit contract in Kenya.

Regulation of Interest Rates Charged Users Of Digital Lending Services

Even though digital lenders in Kenya may still be allowed to lend, the law would however, if assented to, see that they do not charge interests on their loans excessively. This is because the CBK could now determine the maximum rate of interest they charge their customers.

The latest move to control the activities of digital lenders follows the removal of legal cap on commercial lending rates by the Central Bank of Kenya in March 2020. The cap, established far back in 2016, which set interest rates chargeable by banks at 4%, was intended to address the issue of the affordability of credit for small enterprises and working people, as they had complained for years that high interest rates had locked them out of accessing credit.

Its removal in March last year has, however, resulted in the proliferation of digital lenders, who seek to take advantage of the business opportunities it offered. For instance, Tala, Branch, which are among top players in the mobile digital lending market in the country, offer interest rates of 152.4 percent and 132 percent per year respectively.

digital lenders licensing Kenya digital lenders licensing Kenya

Kenya Bans Digital Money Lenders, Extends Loan Repayment Period For Businesses

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

Kenya Plans To Shut Down Unlicensed Ecommerce Platforms

October 10, 2021

The Communications Authority of Kenya (CA) plans to shut down ecommerce companies that operate without a license in the country, a move that would certainly affect many online retailers with a large social media following.

“The authority is currently carrying out a market study in the postal and courier sub-sector in order to establish the service access gaps to inform remedies and initiatives towards boosting services for consumers,” Mr Chiloba said while marking the World Post Day.

“The findings will enable the authority to take some interventions and address some of the noted challenges experienced by players and consumers of postal courier services.”

Here Is What You Need To Know

Kenyan consumers have expressed alarm in recent months about online stores that promote their products using social media platforms such as Instagram, WhatsApp, and Twitter, only to find out later that they are scams.

According to reports, users are frequently advised to use mobile money to make payments, only to discover that they have been barred by the store across all platforms or that their usernames have changed.

Firms that have not been licensed to provide e-commerce services by the CA, according to ICT Cabinet Secretary Joe Mucheru, should be shut down.

“My ministry and the industry regulator noted with concern that a number of firms took advantage of the Covid-19 pandemic to start offering unlicensed courier services in the country,” he said.
Read also Kenyan Startups To Secure Up To $27k In Loans Without Collateral, Courtesy of Absa-Melanin Kapital Partnership

“I am calling upon the CA to enhance its enforcement interventions across the country and ensure those firms operating without licences are weeded out of the market.”

The effort to tighten the sector’s regulations is also seen as an attempt to give Kenya’s Postal Corporation a fighting chance.

The state-owned company is battling a slew of problems, including technological disruption, competitiveness, mismanagement, and the Covid-19 pandemic.

CA canceled the postal and courier licenses of 21 service providers, including many bus and matatu Saccos, in April of this year.

Modern Coast Courier, Ballore Transport and Logistics, Skynet World Express, Global Freight Logistics, Randa Coach, and Tahmeed Courier were among the companies who participated.

PCK raised the cost of sending letters within the country by 57% a few months later, the second price hike in less than a year.

shut down ecommerce Kenya

A New $150m Funding Commitment Launched For African Startups, Courtesy Of Choose Africa Initiative

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

A New Startup Bill In Cote D’Ivoire Is Nearing Completion

October 8, 2021

On Monday, October 4, 2021, a validation workshop in respect of a proposed ‘Startup Bill’ in Cote d’Ivoire began at the President Hotel in Yamoussoukro, the country’s official capital, and ended on Wednesday, October 6. The meeting followed a consultative workshop held in Yamoussoukro from August 30 to September 3, 2021. The workshop saw the participation of many members of the startup ecosystem in Côte d’Ivoire, including representatives from the General Secretariat of the Presidency of the Republic, the Prime Minister, six technical ministries, and several supervision structures in the country, all with the common goal of making the startup initiative a common cause.

The Startup Act in Cote d’Ivoire intends to create a holistic environment for the development, conduct of business, and regulation of startups, according to Rokia Fofana, the country’s Director of Cybercrime and also Director of the Scientific Committee.

“As a result, the current workshop aims…to validate the outcomes of the first workshop’s work by specialists from the Ivorian government and other actors in the digital economy from the many technical ministries who are attending this meeting. The goal is to reach an agreement on a text that will be submitted to the government and which will then go ahead to become law,” he said.

To that end, participants at the meeting focused on substance and form questions for the three-day period in order to fine-tune the proposed law.

Minister Roger Félix Adom of the Digital Economy, Telecommunications, and Innovation, who chaired the workshop, stated that the initiative is in line with one of the government’s and the President of the Republic’s strategic plans to promote the digital economy as well as make technology the engine of structural transformation of the country’s economy.

The Minister stated that his department has devised a digital strategy based on seven pillars in order to achieve this.

“In order to achieve our goals, we must encourage digital businesses to be innovative and value-creating. This step is critical in completing our transition and establishing ourselves as a big innovator,” the minister said, adding that “We have taken the initiative to design a measure called the “STARTUP ACT,” which will stimulate the establishment of a fabric of new innovative digital enterprises in Côte d’Ivoire.”

According to him, the “STARTUP ACT” draft law that was presented to participants for finalization was previously submitted for the contributions of various stakeholders during the last workshop, allowing it to be prepared.

“The most recent edition of STARTUP also took into consideration the relevant remarks of a committee of specialists,” he said.

“This draft bill will be submitted for a validation session before the General Secretariat of the Presidency, the Prime Minister, the General Secretariat of the Government, the Ministry’s advisory body, as well as CI 20, the organization that represents Ivorian startups and the entire private sector ecosystem before final adoption by the government,” he said.
Read also:Binary Innovative Technology Solutions on a Drive to Support its Growth

“Not to add that this law, which would provide tax incentives, must take into account a win-win situation between entrepreneurs and the government so that citizens in Côte d’Ivoire can benefit from new services,” he said.

Startup Bill Cote D’Ivoire Startup Bill Cote D’Ivoire

Cote D’Ivoire Launches A College Of Startups, Sets Up A $1m Startup Fund

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

Betting Tax Is Officially 7.5% In Kenya, Down From 20%

October 1, 2021

President Uhuru Kenyatta has accepted a reduced 7.5 percent gaming turnover tax, giving the Kenyan online gambling business a new lease of life. Previously, Kenya’s gaming turnover tax was a whopping 20%, making things difficult for Kenyan gambling companies. Kenyan gaming firms were taken aback when Kenyan legislators imposed a whopping 20% gambling turnover tax in 2018. Gambling companies sought that the Kenyan Revenue Authority explain its decision and describe why the gambling turnover tax was increased from 10% to 20% without reason.

Uhuru directed Ukur Yatani Kanacho, the Kenya Treasury Secretary, to conduct a review of the 20% tax rate for gaming businesses before modifying the budget for the following fiscal year. Following the conclusion of the study, the former ambassador advised that the Kenyan government remove the contentious gaming turnover tax and amend the Finance Bill 2021. His suggestion was that gambling businesses in Kenya be required to pay a lesser turnover tax of 7.5 percent.

Despite his advice, the President’s hostility to both land-based and online gambling activities made it unclear whether he would sign the new legislation. Needless to say, as that unwelcoming pattern continued, the Kenya gambling business suffered greatly. Several major gaming companies, notably SportPesa, have also decided to exit the sector.
The Kenya gambling sector has been revived as a result of the President’s decision to accept the amended 7.5 percent turnover tax on gaming. His move to dramatically decrease gambling tax rates will make the Kenyan gambling business more friendly to large operators, such as SportPesa, which will most likely return.

Other international gambling companies in the business, including as Betsson, which recently teamed with Bet High Kenya to launch its Betsafe brand, have praised the President’s decision. Starting July 1st, a revised, more welcoming 7.5 percent gaming turnover tax would apply to all turnover received by gambling companies in Kenya. Players will gain from the reduced gaming turnover tax since they will receive the great majority of their earnings.

Kenya tax 7.5% Kenya tax 7.5%

Kenya Reduces Betting Tax From 20% To 7.5%

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

Mauritius Has New Crowdfunding Rules Which Allow Startups To Raise Up To $350k

September 18, 2021

Mauritius is consistently proving a pace setter in terms of progressive legislations in support of startups in Africa. To this effect, the Financial Services Commission of Mauritius (“FSC”) has issued the Financial Services (Crowdfunding) Rules 2021 in line with its strategy to sustain the growth of the Fintech ecosystem within the Mauritius International Financial Centre.

*Chief Executive of FSC, Dhanesswurnath Thakoor*

“The introduction of these Rules on investment-based Crowdfunding represents another key regulatory milestone for the FSC. It, in fact, demonstrates the fruitful collaboration between the regulator and the industry with the objective of enabling the provision of new financial products/services for the ultimate interests of our stakeholders. It shall complement the Peer-to-Peer Lending Rules that was issued last year. Both frameworks will foster innovation and facilitate access to finance to SMEs,” said Chief Executive of FSC, Dhanesswurnath Thakoor.

Without a crowdfunding licence given by the Commission, no one may run a crowdfunding platform in Mauritius under the new rules.

Under the new rules, there is no restriction on the nature and type of businesses that may raise funds through a crowdfunding portal. However, companies listed on the Mauritius stock exchange are barred from seeking funding on a crowdfunding platform.

Again, a crowdfunding portal is permitted to handle funds on behalf of investors, provided that it opens a non-interest bearing account with a commercial bank duly licensed by the Bank of Mauritius, under the new rules.

The rules takes effect from 4th September, 2021.

What Are The Requirements For Obtaining The New Crowdfunding License?

To be able to obtain the new crowdfunding license:

A crowdfunding operator must be a Mauritius-based legal entity.

The crowdfunding platform’s registered office and principal place of business must both be in Mauritius.

A crowdfunding operator must also have a minimum paid up capital of $47k (MUR 2 million).

The crowdfunding operator must also observe standard corporate governance practices, including ensuring that it is managed by a board of directors composed of a minimum of 3 directors, of which at least — (i) 30 per cent shall be independent directors; and (ii) one shall be resident in Mauritius.

What Is The Highest Investable Amount?

Under the new rules, a crowdfunding operator must ensure that a retail investor does not invest more than MUR 350,000 ($8.2k) on the platform in a 12-month period. However, expert investors are not subject to any investment limits.

In any case, a company seeking money through the crowdfunding platform may only offer to raise MUR 15 million ($350k) over a three-year period.

To find more about the new rules, click here.

Crowdfunding rules Mauritius Crowdfunding rules Mauritius

Security Token Trading In Mauritius Now Eligible For Licensing Under New Regulation

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer