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All Mobile Money Transactions Under $9 Remain Free— Central Bank of Kenya

June 26, 2020

The Central Bank of Kenya (CBK) has extended the waiver on mobile money transactions fees under Sh1,000 ($9.4) for another six months after the initial 90-day period lapsed, a move that could see Safaricom, the largest telecommunications provider in Kenya, lose up to Sh15.3 billion, according to the company.

“CBK has determined that the wallet and transactions limit…will remain in place from July 1 until December 31, 2020,” the regulator said in a statement.
“More than 1.6 million additional customers are now using mobile money channels. However, business-related transactions have declined marginally,” added the CBK. Earlier data from the regulator showed that the daily average mobile phone money transactions of less than Sh1,000 grew by 83 percent to Sh1.98 billion daily between April 20 and May 10 when compared to the days before March 16 — just four days after Kenya announced its first positive Covid-19 case.

Here Is What You Need To Know

The banking sector regulator said that the free service aimed at cutting down on the handling of cash and the attendant risk of Covid-19 being transmitted from person to person will run to the end of December. The order will also affect commercial banks, which had on March 16 removed charges for customers moving money between their mobile wallets and bank accounts.

*Africa is leading mobile money operations in the world. See Source*

Safaricom had earlier said that the free M-Pesa service had seen it lose an average of Sh1.8 billion monthly since mid-March, a pointer that it could miss sales of up to Sh16.2 billion in the nine months to December.
The Sh16.2 billion is equivalent to about a fifth or 19.1 percent of M-Pesa’s annual sales, underlining the impact of the pandemic on Safaricom’s earnings.
CBK said that the free service has increased low value mobile phone transactions, which account for 80 percent of all mobile money transfers.

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.

Lending Rate in Kenya Now 8.5%, Down From 9%, First Ever In A Year

November 26, 2019

Kenya ’s central bank is increasingly encouraging borrowing for Kenyan businesses. The bank’s Monetary Policy Committee has further announced a lowering of the Central Bank lending Rate (CBR) from 9.0 percent to 8.50 percent. The bank in a statement said it took the decision noting that inflation expectations remained within target range and there was room for accommodative monetary policy to support economic activity. The bank also noted that the economy was operating below its potential.

Here Is All You Need To Know

In October, inflation stood at 4.9 percent compared to 3.8 percent in September. The bank said it expected overall inflation in November to remain within range owing to lower food and electricity prices.
The Central Bank of Kenya (CBK) said real Gross Domestic Product (GDP) grew by 5.6 percent in the first half of the year and the economy remained strong despite a slowdown in agricultural production due to delayed and below average rainfall.
However, the bank added that the Kenyan economy could experience stronger growth in the second half of the year based on leading indicators supported by a number of factors.
The committee also welcomed the repeal of the capping of interest rate which it said led to a notable restriction of credit especially to the financially vulnerable.
The committee said the change should reinstate transparency of monetary policy decisions and bolster transmission of monetary policy.
The committee said it was prepared to take any extra measures as it continued to monitor economic developments locally and globally.

In October inflation rose to 4.95 percent from 3.83 percent, mainly due to temporary rise in maize grain and sifted flour while non-food inflation remains below 5 percent, “indicative of muted demand pressures and limited spillover effects of the excise tax indexation in July,” CBK said.

It added another adjustment in excise taxes in November are expected to have only a marginal impact on inflation, which is expected to remain within the target range in the near term.

Kenya’s shilling, which has been more stable in recent years after plunging in 2015, fell in the first part of the year but since early October it has bounced back.

Following the rate cut, the shilling dropped 0.45 percent to trade at 102.06 to the U.S. dollar, up 1.7 percent since October 1 but marginally down since the start of this year.

“The foreign exchange market has remained stable, supported by the narrowing current account deficit and increased portfolio and other investment inflows,” CBK said, adding the current account deficit had narrowed to 4.1 percent of gross domestic product in the 12 months to September from 5.1 percent in September 2018 and is expected to narrow to 4.3 percent of GDP in 2019 from 5.0 percent in 2018.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

Going Forward, Bank Directors Would Pay For Cyber Crimes In Kenyan Banks

July 17, 2019

The Kenyan Central Bank is taking the bull by the horns now. Cybercrimes by banks involving a breach of customer information and eventual stealing of funds will no longer only be thrown open to the court to decide who is liable or not, bank directors will have to pay for any breach of customer information going forward.

The Central Bank of Kenya (CBK) has issued new rules to payment service providers including commercial banks and technology companies warning the boards of directors that they face “ultimate” liability in case of criminal breaches.

A Look At The Guidelines

In the guidelines aimed at stemming cybercrime, the CBK says boards will take responsibility for breaches of customer information.

“Payment Service Providers (PSPs) should carry out regular independent assessment and audit functions that shall be undertaken by the internal and external audit and risk functions … The board of directors is ultimately responsible for the cybersecurity of the PSP,” said CBK.

PSPs including firms like Mastercard, Visa, Safaricom, Airtel, and Telkom have 90 days to comply with the requirements published this month.

Most common vulnerabilities on the internal network (percentage of banks)

Firms working with PSPs are also expected to treat customer information confidentially.

“Outsourcing agreements should be governed by a clearly written contract, the nature and detail of which should be appropriate to the materiality of the outsourced activity in relation to the ongoing business of the PSP,”

“Some of the key provisions of the contract include controls to ensure customer data confidentiality and service providers’ liability in case of breach …”

Some financial institutions are required to collect detailed customer information for anti-money laundering, tax, and accounting reasons.

Privacy experts around the world have recently expressed concerns about how personal data is collected and used by companies.

In April, the government approved a tough policy on data protection, paving the way for it to be tabled in Parliament.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Afrikan Heroes

Tag: CBK

All Mobile Money Transactions Under $9 Remain Free— Central Bank of Kenya

Here Is What You Need To Know

Charles Rapulu Udoh

Lending Rate in Kenya Now 8.5%, Down From 9%, First Ever In A Year

Here Is All You Need To Know

Charles Rapulu Udoh

Going Forward, Bank Directors Would Pay For Cyber Crimes In Kenyan Banks

A Look At The Guidelines

Charles Rapulu Udoh

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