The National Bank of Rwanda and the Central Bank of Kenya have signed a new agreement aimed at making it easier for payment service providers to operate across both countries. The initiative is expected to improve regional financial integration and simplify digital payments between Rwanda and Kenya.
The agreement, signed as a Memorandum of Understanding (MoU), focuses on developing what is known as a Licence Passporting Framework for Payment Service Providers (PSPs). This framework will allow companies licensed in one country to operate in the other through mutual recognition of their licenses, reducing the need to go through separate and repetitive regulatory processes.
In a joint announcement, the two central banks said the framework will help address regulatory duplication that has previously made it difficult for payment service providers to expand across borders.
“The Licence Passporting Framework will represent an important step towards addressing the challenge of duplicative regulatory processes despite substantial similarities in requirements,” the statement said.
Under the new arrangement, licensed payment service providers will be able to expand their services between Rwanda and Kenya more easily while both central banks continue to maintain strong oversight and cooperation in supervision.
The initiative is also part of broader regional efforts to strengthen financial integration within the East African Community.
“By promoting mutual recognition of licensing regimes, the Framework will facilitate the responsible expansion of licensed PSPs across Kenya and Rwanda, while preserving robust regulatory oversight and supervisory cooperation,” the statement added.
According to the two institutions, the agreement aligns with the East African Community Cross-Border Payment System Masterplan, which aims to build a more integrated, efficient, and inclusive regional payments system.
The plan encourages partner states to work toward mutual recognition of payment service provider licenses, helping reduce regulatory barriers that have historically slowed the expansion of digital payment services across borders.
The Central Bank of Kenya emphasized that it remains committed to strengthening regional collaboration and ensuring payment systems continue to meet the changing needs of the economy.
If successfully implemented, the new framework could make cross-border financial services faster, cheaper, and more accessible for businesses and individuals operating between Rwanda and Kenya.
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