- February 11 2025
- BM
Fincra appoints former Bundle CEO Emmanuel Babalola as chief commercial officer
Fincra, a B2B startup that provides payment infrastructure that enables remittance companies to process cross-border transactions, has appointed Emmanuel Babalola as its new chief commercial and growth officer. The appointment comes as Fincra undergoes a strategic change to its business. Babalola was CEO of Bundle, a social payments app for cash and cryptocurrency, which shut down its exchange services in July 2023 to focus on Cashlink, its peer-to-peer platform. He was also the Director for Africa at Binance, the world’s largest crypto exchange. “His track record of scaling platforms, driving innovation, and advocating for financial inclusion aligns perfectly with our mission to build seamless payment rails for Africa,” said Fincra’s CEO Wole Ayodele. “His leadership will be instrumental as we continue to push boundaries and redefine payments across the continent.” Founded in 2021, Fincra’s APIs allow fintechs to build and scale cross-border payment solutions. The company has processed over $10 billion in transactions since 2023, serving clients like Lemfi, OneLiquidity, and Cleva. Fincra also offers an API that helps Nigerian businesses with local payment collection, either through bank transfers or card transfers. It operates in Ghana, South Africa Kenya, Uganda, the United Kingdom, Europe, and North America with plans to expand into the Francophone region. “Africa’s financial ecosystem is evolving rapidly, and Fincra is at the forefront of building the payment infrastructure powering the next generation of businesses and entrepreneurs,” Babalola said on his appointment. “My mission has always been to enable freedom and prosperity for Africa through technology, and joining Fincra is an exciting opportunity to amplify this vision.”
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- February 11 2025
- BM
Next Wave: Unlocking alternative funding streams for African startups
Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner Join us for TechCabal Battlefield, Moonshot’s startup competition where you can showcase your startup idea to a global audience and an esteemed panel of judges and stand a chance to win up to 2.5 million naira in funding for your business! Click to register for TC Battlefield First published 09 Feb, 2025 Venture Capital (VC) has long been hailed as the best funding model for high-growth startups. However, it is challenging for most African founders to secure funding. In 2024, African startups raised $3.2 billion across over 182 equity and debt funding deals. Most of these funds went to a few tech-heavy startups in key markets like Kenya, Nigeria, South Africa, and Egypt, leaving many promising businesses unfunded. In a world where VC funding is often seen as the only ticket to success, what if African startups can scale without it? The limits of VC cheques in Africa Asset-light and high-growth sectors like e-commerce and fintech favour traditional VC models, which rely on high valuations and potentially quick exits through acquisitions or IPOs. Between 2019 and 2023, fintechs and e-commerce companies accounted for 75% of total funding to African founders. Despite increasing interest from Africa-focused VCs in essential sectors like agritech and health tech, these sectors often clash with investors’ demand for rapid growth and fast exits. Additionally, systemic and cultural factors make VC funding inaccessible to many African founders. In countries like Kenya, investors favour expatriate-owned startups or those founded by Western-educated Kenyans, while local entrepreneurs without patronage struggle. The emphasis on tech-driven scalability has further sidelined businesses supporting most African economies, such as agriculture, manufacturing, logistics, and local commerce. VC firms often target exits within five to seven years, a model likely incompatible with the realities of African markets. While some venture-backed startups achieve an exit in as little as 2 years, most take about six years with five funding rounds to get to an Initial Public Offering (IPO). Unlike the US or Europe, which have more homogeneous markets, the 54 African countries have fragmented markets with different regulations and dysfunctional regional economic blocs like EAC, ECOWAs, and SADC. This fragmentation makes scaling across borders a bureaucratic nightmare and expensive, making startups less attractive to VCs that may be looking for quick expansion. The widespread low-income levels in most African countries mean lower spending, loosely translating to lower profit margins for local businesses. This makes growth difficult for startups that target mass-market consumers. Around 35% of the over 1.4 billion people in Africa live below $1.90 per day, the global extreme poverty line. Partner Content: Read: [Raenest Returns as Headline Partner for Africa Tech Summit Nairobi 2025, Championing Global Growth for African Tech] here. Another problem facing African founders is insufficient local investor networks. The continent’s VC landscape has relatively few local investors. Since most VCs investing in Africa are foreign, a disconnect exists between the operational realities of the regional economies and investors’ expectations–though some of them understand the continent. Given these challenges, African founders should explore alternative funding, considering the continent’s realities. From revenue-based financing to grants from development agencies, these approaches could be the key to Africa’s startup ecosystem, overcoming sometimes unrealistic expectations from VCs. These alternative approaches prioritise sustainability, allowing the founders to scale businesses at a pace that matches market realities. Thriving without VC backing Contrary to the growing belief that startups cannot scale without VC funding, companies like Kenya’s BitPesa (now AZA Finance) and Pesapal have proven otherwise. Pesapal, a payments service provider, has built its business through strategic partnerships with banks and mobile money platforms, focusing on sustainable revenue growth instead of external funding. In an industry where VC-backed fintechs have struggled to crack the market, Pesapal has registered steady growth by prioritising cash flow and profitability. Some well-funded VC-backed competitors and fintechs burned through cash, expanding in multiple markets to meet investors’ expectations—some, like Lidya and KopoKopo, eventually pivoted or downsized, abandoning unsustainable cost structures. Conversely, BitPesa adopted an organic expansion, leveraging partnerships with established brands instead of burning investor cash. The approach allowed the company to prioritise long-term profitability over short-term high valuations. In multiple media interviews, Agosta Liko, Pesapal co-founder, claimed the company is profitable without revealing details. The company has over 30,000 POS machines in Kenya, with commercial banks following. According to the Central Bank of Kenya (CBK), there are 56,000 POS, meaning Pesapal controls over half of the market. Today, Pesapal processes over a million transactions daily across Kenya, Uganda, Tanzania, Rwanda and Zambia. In its early years, Cellulant relied on grants and corporate partnerships before eventually securing institutional investment. These two examples show that African startups can explore alternative funding models like bootstrapping, strategic alliances, grants, and revenue-based financing, which supports long-term growth without the pressure that comes with VC funding. Instead of giving up equity, founders can raise capital pegged on their revenues. While revenue-based financing (RBF) is still uncharted territory for most African entrepreneurs, it can be a favourable model, especially in industries with steady income streams. Under this model, investors receive a share of revenues until the agreed amount as a multiple of principal investment–usually three to five times. South Africa’s Linea Capital has started giving startups funding through this model, promising a non-dilutive, collateral-light funding structure compared to the VC option. By linking repayments to a company’s revenue growth instead of fixed schedules, like in the case of loans, RBF allows founders to scale sustainably. Partner Content: Read: [Flutterwave, Yellow Card, OmniRetail named finalists for inaugural Africa Tech Summit Awards] here. Ethiopia’s Cooperative Bank of Oromia is piloting RBF for small businesses with cheques of up to $1,700. In a market with limited foreign investment and strict collateral requirements for bank loans, Cooperative Bank’s experiment could help entrepreneurs raise capital that fits their needs. Its success suggests that RBF could be among the alternatives African founders can ride on to fund their ventures. Companies like Kenya’s Little
Read More- February 11 2025
- BM
Swypt launches Kenya’s first decentralised stablecoin as crypto regulations tighten
Swypt, a decentralized finance platform, has integrated cKES, Kenya’s first decentralized stablecoin on Mento, a separate decentralized platform, pegged 1:1 to the Kenyan shilling. This move reflects a growing trend in Kenya’s fintech landscape, where stablecoins are seen as an alternative to traditional mobile money and banking systems. However, the country’s evolving regulatory frameworks may influence the platform’s growth. Founded in May 2023 by Davis Thoyah, Swypt seeks to address inefficiencies in peer-to-peer (P2P) crypto trading. The platform debuted at ETHSafari 2023 and officially launched in June 2024. It offers a suite of payment solutions, including stablecoin transactions and SME payments, to enhance accessibility and efficiency in the digital payments ecosystem. Swypt’s integration of cKES allows users to make cross-border transactions, addressing the need for faster and more affordable payment options in a growing crypto-savvy market. However, regulatory changes in Kenya could pose challenges. The National Treasury’s Virtual Asset Service Providers Bill (2025) proposes that cryptocurrency firms establish local offices in Kenya and appoint executives subject to regulatory approval. If passed, this bill would allow the government to license and regulate crypto service providers within the country, potentially creating new operational hurdles for companies like Swypt. In addition, the Finance Act of 2023 introduced a 3% tax on income generated from the sale of digital assets, including cryptocurrencies and non-fungible tokens (NFTs). This tax policy indicates the Kenyan government’s intent to incorporate digital assets into its formal tax framework, signaling both an opportunity for revenue generation and potential friction with users who may face higher transaction costs. Under the proposed Virtual Asset Service Providers Bill, the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA) would jointly regulate the crypto sector. The CBK would oversee service providers offering payment and currency-related solutions, while the CMA would regulate entities involved in crypto trading, exchanges, and initial public offerings of virtual assets. These regulations could legitimize the industry but also create new compliance burdens for decentralized platforms like Swypt. While these developments suggest both opportunities and challenges for Swypt, the company will need to carefully navigate the regulatory landscape. Adhering to local office requirements and executive vetting could enhance operational transparency, but it could also increase administrative costs. Furthermore, the 3% digital asset tax could impact user adoption, particularly if it raises the cost of transactions or limits the appeal of crypto-based solutions to price-sensitive users. For now, Swypt offers an alternative payment rail for SMEs, gig workers, and cross-border traders. Its success will rely on navigating the evolving regulatory landscape, achieving merchant adoption, and convincing Kenyan users of cKES’s viability as an alternative to traditional mobile money services.
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- February 11 2025
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TechCabal Daily – CAR launches a meme coin
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning Let’s dive in. Why NIBSS picked QR codes as the future of small-value payments Smartphone manufacturers to pay $1,967 in licence fees in Kenya Central African Republic launches meme coin, $CAR World Wide Web 3 Events Fintech Why NIBSS picked QR codes as the future of small-value payments Image Source: Google. No matter the governor at the helm, Nigeria’s central bank loves the idea of a cashless country. The idea has flowed down to almost all financial institutions, including the Nigerian Inter-Bank Settlement System (NIBSS), the country’s payments switch. Now, NIBSS wants everyone to think of QR codes when paying for low-value in-person transactions. But, replacing cash is hard—the alternative must offer instant settlement, security, affordability, and easy reversals. NIBSS believes QR codes meet these criteria: transactions are instant, stickers are cheap to print, and they are secure. Last week, Premier Owoh, NIBSS CEO, told our fintech reporter, Muktar Oladunmade, that the Lagos State government integrated the Nigeria Quick Response (NQR) into its ERP software and in its first week, over 750,000 bills were paid with QR codes. Engineers at NIBSS say they have reduced the latency by eliminating separate fee queries and improved the security of QR code payments with stronger authentication measures. Users can only make QR code payments from their banking app, adding an extra layer of security. The banks are also on the same page with NIBSS. Shamsudeen, a product manager at UBA, was excited to show our reporter how QR code payments work from the bank app. He logged in, selected NIBSS QR on the homepage, scanned a Providus Bank QR code, sent ₦10 ($0.0067), and received a printed receipt. Sterling Bank employees displayed a separate app for QR codes marketed at merchants. In his article, Muktar Oladunmade argues that the success of QR payments will depend on how efficiently merchants can accept payments safer, faster, and more transparently with QR codes. That way, word-of-mouth marketing will allow QR codes to become ubiquitous. After all, fintechs became widely accepted after they shone during 2023’s cash scarcity. May the superior product win. Afincran Connect: A Fintech Mixer by Fincra Fincra is hosting an exclusive fintech mixer on 12th February 2025 in Nairobi, bringing together industry leaders for networking, conversations, and connections. Nairobi | 18:00 – 21:00 EAT Limited spots—RSVP now. Economy Smartphone manufacturers to pay $1,967 in licence fees in Kenya Communication Authority of Kenya Director General David Mugonyi. IMAGE | CA Kenya has introduced a new rule requiring foreign smartphone and car-tracking device companies to pay a $1,937 licence fee to keep selling their products there. A licence will certify these phone-makers and distributors of their products as authentic. Foreign original equipment manufacturers (OEMs) like Samsung and Transsion (Tecno and Infinix smartphones), which are the most-used smartphone brands in the country will have to pay $1,937 for a 15-year operating licence, plus 0.4% of their Kenyan yearly sales to the government. While the government argues that this will stop fake products from entering the market, it conveniently excludes local smartphone manufacturers and distributors from the licensing rule. Kenya may not be an important market for large global smartphone makers like Samsung—compared to the Big 3; South Africa, Egypt, and Nigeria, which receive the largest imports—but the licence fee is small and likely won’t stop them from doing business in Kenya. On the other hand, smaller foreign companies might struggle to afford the fee, reducing the number of affordable phones available in the informal market. Unknown brands control about 9.5% of the Kenyan smartphone market—likely smaller foreign smartphone makers and untried brands trying to establish a market in Kenya. Kenyans buy them because they are cheaper than high-end Samsung phones. Seeing reduced participation from these untested brands, distributors will focus on the bigger brands, paying the licence fee to become verified vendors. Hence, this will likely cause them to raise prices to cover the cost, making phones more expensive for Kenyans already dealing with high living costs. Kenya isn’t the first African country to try this. Egypt recently introduced similar taxes on foreign phone companies that don’t manufacture locally. However, for Kenya’s new rule to work, the government will need to enforce it strictly. If they don’t, fake phones might keep flooding the market. In the end, it’s a balancing act: the move could help improve the quality of phones in Kenya (by taxing name brands to show proof of work) and empower local participation. While it’s a win for a country in search of more ways to widen its tax net without suffering another public drama, it is the end consumer who inadvertently bears the brunt…again. How Paystack protects your business from cyber fraud Discover Paystack’s many security features and best practices for fraud prevention. Learn more→ Cryptocurrency Central African Republic launches meme coin, $CAR Image Source: TechCabal The Central African Republic (CAR)—the first and only African country to accept bitcoin as legal tender, has thrown itself deeper into its crypto experiment with the launch of $CAR, a meme coin that puts the country at the centre of a digital currency spectacle. President Faustin-Archange Touadéra launched the token on X (formerly Twitter), calling it an “experiment” in national identity, economic potential, and internet culture. The government is doubling down on digital assets—this time, with a cryptocurrency that trades as much on hype as on substance. Presently, $CAR appears to be trading on neither hype nor substance. The meme coin has failed to garner any interest from meme coin traders—or its own citizens—with the coin dumping fast. At 19.40 (WAT) on Monday, about 23,559 traders had bought the coin, with 20,330 selling. In the last 24 hours, the coin price dipped by over 90%, shedding off more than nine-tenths of its market cap. The rollout of $CAR also hasn’t been seamless. A dedicated X account for $CAR was suspended almost immediately, forcing the government into damage control. CAR may be a crypto-friendly nation,
Read More- February 10 2025
- BM
Breaking: KCB lowers lending rate to 14.6% amid CBK crackdown on non-compliant banks
Kenya Commercial Bank (KCB), Kenya’s largest bank with an asset base of KES 1.4 trillion ($10.8 billion), has lowered its lending rate from 15.6% to 14.6%, effective February 10, 2025. This move follows mounting pressure from the Central Bank of Kenya (CBK) asking commercial banks to cut lending rates in response to reductions in the benchmark rate. “The final lending rate is based on a customer-specific margin, adjusted to the base rate, in line with the approved Risk-Based Credit Pricing Model,” KCB said in a statement seen by TechCabal. “This applies to all existing and new KShs-denominated facilities and excludes fixed-rate credit facilities.” The CBK has taken an aggressive stance against lenders who are reluctant to pass on the benefits of lower borrowing costs to customers. On February 5, Governor Kamau Thugge said the regulator has begun physical inspections of banks to enforce compliance. The CBK has also invoked penalties under the Banking Act and will impose daily fines and hefty financial penalties on banks that fail to reduce rates. During the February 5th monetary policy meeting, the regulator cut the cut the benchmark lending rate to 10.75% from 11.25% and cut the cash reserve ratio to 3.25% from 4.25%, releasing KES 73.7 billion ($570 million) into the economy. However, banks had been slow to respond, citing higher fixed deposit costs as a constraint. With borrowers struggling under expensive credit, the CBK’s intervention aims to stimulate lending, support economic recovery, and improve access to affordable credit. Lower rates could also help banks manage rising non-performing loans, which have begun to decline in key sectors like trade, real estate, and manufacturing. KCB’s decision to lower its rates aligns with this objective, signalling a potential trend among other lenders to follow suit. The development arrives as private sector credit hit a 22-year low in December 2024, a contraction blamed on costly loans.
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- February 10 2025
- BM
The People with Power at Nigeria’s Central Bank
When you think of Nigeria’s Central Bank (CBN), Governor Olayemi Cardoso comes to mind. Since taking office in September 2023, he has led the CBN’s return to orthodox monetary policy, devaluing the naira and increasing interest rates to tame quickening inflation. While the buck stops at his table, supporting Cardoso are four deputy governors and a cadre of directors who oversee crucial departments at the CBN. Appointed on the same day as Cardoso, the four deputy governors report directly to him. Dr. Bala M. Bello heads the Operations Directorate, ensuring the smooth execution of the CBN’s banking functions and financial transactions. Mr. Muhammad Sani Abdullahi leads the Economic Policy Directorate, formulating monetary policies that influence inflation, exchange rates, and economic stability. Mr. Philip Ikeazor oversees the Financial System Stability Directorate, while Ms. Emem Usoro directs the Corporate Services Directorate. Beneath the deputy governors, a group of directors runs the CBN’s vast operational structure. Their work ensures policy execution, risk management, and the bank’s overall effectiveness. Since May 2024, the CBN has undergone a restructuring of its key teams and operations affecting over 1,000 employees and over 16 directors. This list outlines the current directors, deputy directors, and assistant directors across key departments within the CBN. Dr. Blaise Ijebor, as Director of Risk Management, identifies and mitigates financial threats, including cybersecurity risks. Lydia I. Alfa, Director of Internal Audit, ensures the integrity of the CBN’s financial and operational processes. Rashida Jumoke Monguno, Director of the Corporate Secretariat, facilitates high-level decision-making within the institution. Jimoh Musa Itopa heads the Payments System Management Department (PSMD), a crucial department responsible for licensing payment switching companies, regulating agent banks, and overseeing cashless policies and open banking initiatives. He was recently reinstated from the Capacity Development Department, a unit responsible for training CBN staff. Muhammad Abba, Director of Human Resources, is responsible for shaping the bank’s workforce, while Rabiu Musa, Director of Finance, oversees the financial accountability of the institution. Sirajuddin Kofo Salam-Alada, Director of Legal Services, ensures compliance with all relevant financial regulations. Aderinola Shonekan, Director of Research, provides data-driven insights that inform the development of monetary policies. Dr. Omolara Duke, Director of Financial Markets, manages the dynamics of Nigeria’s capital and money markets. Adetona Adedeji, Acting Director of Banking Supervision, plays a key role in regulating Nigeria’s commercial banks. Mr. Saad Hamidu, Director of Development Finance, drives financial inclusion and economic development programs. Philip Ndanusa Wondi, Assistant Director and Coordinator for the Governors, facilitates executive operations, while Dr. Adenike Olubunmi Ojumu is the Deputy Director of Medical Services. Mr. Ibrahim Umar Hassan is Assistant Director and Head of Strategy Management at Financial System Strategy. Sidi Hakama, Acting Director of Corporate Communications, manages the bank’s media relations and communications. Yakubu Bello, Deputy Director of Statistics, provides economic data. Ladi Raulatu Bala-Keffi, Acting Director of Monetary Policy, influences key interest rate decisions. Hamisu Abdullahi, Director of Banking Services, ensures seamless banking operations. Mohammed-Jamiu Solaja Olayemi, Acting Director of Currency Operations, manages currency circulation. Aisha Isa-Olatinwo, Acting Director of Branch Operations, oversees regional banking infrastructure, while Mujtaba Muhammed Farouk is the Director of Reserve Management.
Read More- February 10 2025
- BM
NIBSS bets on QR codes as a cash alternative for small-value payments
The Nigeria Inter-Bank Settlement System (NIBSS), the country’s largest payment switch, is betting on QR codes as a cash alternative for small-value transactions after improving its Nigeria Quick Response (NQR) payment platform. At a press conference on Thursday, NIBSS engineers said they have improved the speed of QR code payments by eliminating separate fee queries and enhanced security with stronger authentication measures. NIBSS has also partnered with the Lagos State government to use QR codes to accept bill payments as a viability test. Premier Oiwoh, NIBSS CEO, told journalists that at least 750,000 bills in Lagos were paid with QR codes in the first week of deployment. The payment switch has also developed a USSD product for feature phones. QR codes closely replicate cash transactions—they are inexpensive to set up, fast, and allow instant reversals. Users can only make QR code payments by scanning with their bank app, adding an extra layer of security. Global QR code payment transactions are expected to grow by 50% over the next four years, reaching $8 trillion by 2029, according to a study from Juniper Research. The switch has partnered with banks like Sterling, UBA, and Providus, to increase QR code adoption. First Bank has integrated QR payments into the homepage of the First Mobile App, the bank’s app, a move that has increased QR code transactions, according to a bank representative. “We saw a spike in usage the moment we placed NQR on the landing page,” a First Bank representative told TechCabal. “It’s an example of how thoughtful user interface decisions can supercharge adoption.” Sterling Bank has developed a self-onboarding app for merchants that allows them to accept QR code payments. Merchants can download the app, register, instantly generate QR codes and print stickers, a model similar to Alipay’s early expansion strategy in China, where QR codes spread through small shops and street vendors. For many merchants, confirming successful transactions is a key issue with digital payments. Fintechs like OPay, PalmPay, and Moniepoint acquired millions of customers during the 2023 cash crunch by providing reliable transaction confirmations, while commercial banks struggled. To address this problem, Providus Bank has introduced receipt printing for QR transactions, while NIBSS is developing the NQR Soundbox, a device that provides audio notifications for successful payments. Soundboxes have successfully driven digital adoption among India’s mom-and-pop shops. Paytm, an Indian fintech, generated $150 million in the third quarter of 2023 alone from sound box subscriptions, with 6.8 million devices deployed. In a demonstration seen by TechCabal, the NQR soundbox was loud enough to cover a 50-meter distance and could announce transactions in English. The soundbox can also store past transaction logs, allowing merchants to reconcile payments by the close of business. The success of QR payments will depend on how efficiently merchants can accept payments safer, faster, and more transparently. This could create a network effect that would champion NQR in a way that top-down marketing alone cannot achieve. Quidax’s website briefly crashes after BBN QR Code advert Kenya boosts payments interoperability with state-backed QR codes
Read More- February 10 2025
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Bento Africa “temporarily” halts operations after rehiring staff to handle backlog
Bento Africa, the Nigerian HR technology startup facing allegations of tax and pension irregularities, has temporarily shut down operations. The decision follows the resignation of founder and CEO Ebun Okubanjo and the layoff of the engineering team after a protest over unpaid January salaries. “We will proceed to temporarily shut down operations to bring stability back to the company,” the company’s board wrote in an email seen by TechCabal. “In view of this, it is important for our clients to refrain from funding their payroll positions during this period. We are confident of the restoration of normalcy soon.” Bento laid off its 10-person tech team in January after employees refused to work until they received their January salaries. Despite resigning on January 30, Okubanjo told employees on January 31 that salaries would be “strategically delayed” to prioritise processing client payroll, according to Google Chat messages reviewed by TechCabal. Bento employees collectively agreed to halt operations until paid, citing financial hardship, Bento Africa under investigation by LIRS and EFCC; CEO Okubanjo denies allegations The January layoffs effectively crippled Bento’s operations, particularly payroll processing for its clients. At least three clients shared on social media that Bento had not processed payroll for their employees in the first week of February. The company, which had automated salary disbursements, has been manually processing payments since 2024 due to problems with payment processors and reconciling underfunded accounts. In an email to customers, Bento said it has paid staff their January salaries, and “reactivated key staff to aid in bringing core functionality back online to clear outstanding payroll obligations triggered by our clients.” However, it is still facing problems disbursing payments for some of its customers. The company plans to refund clients for whom it cannot disburse salaries before the close of business on Tuesday. The difficulty in payroll processing, abrupt CEO resignation, and allegations of financial discrepancies, including failure to remit tax and pension payments, makes the company’s future uncertain. But in its email to customers, Bento’s board said it is “confident of the restoration of normalcy soon.”
Read More- February 10 2025
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Kenya’s $1,900 licensing fee for phone distributors threatens small vendors
Small vendors who have long provided affordable phones and car trackers to Kenya’s price-sensitive market are now at risk of being priced out by new government regulations—posing a significant threat to their survival. The Communications Authority (CA) of Kenya has proposed new licensing requirements for phone and car tracker vendors and distributors, which could impact small businesses already struggling under high taxation and low consumer purchasing power. Under the new rules, only licensed manufacturers and distributors will be allowed to import and sell mobile phones, car trackers, and other low-power communication devices. To obtain a license, distributors must pay a one-time fee of $1,937 (KES250,000), valid for 15 years and an annual charge of 0.4% of gross turnover. This move aims to curb the influx of substandard devices and ensure compliance with local standards. CA claims the unchecked distribution network has raised concerns over consumer safety, e-waste, and network security. If approved, manufacturers like Apple and Samsung will need a license to sell their devices in Kenya. Third-party distributors and retailers will also be mandated to pay for the license. However, the CA will exempt local phone manufacturers, but they will be required to sell only to licensed distributors. The proposal raises concerns that it will edge out small vendors who rely on low-cost, informal trading. With Kenya’s economy heavily reliant on affordable phones and tech gadgets, many informal traders currently source their products from unregulated suppliers at cheaper prices. This flexibility has allowed them to cater to the country’s price-sensitive market. “People who bring in fake phones will still find a way. That’s the challenge I’m foreseeing,” said Monica Macharia, a retailer who sells affordable smartphones in Nairobi. “Already the cost of doing business is high. If the enforcement is weak, the black market will thrive at the expense of licensed shops.” The CA argues that the new rules will protect consumers and improve the quality of devices in the market by addressing consumer safety, e-waste, and network security issues. Currently, the influx of counterfeit phones has raised concerns about the quality and security of devices circulating in Kenya. The CA claims that informal vendors often sell substandard devices that do not comply with the requirement for a unique International Mobile Equipment Identity (IMEI), which could pose a security risk. Yet, many small business owners argue that the new regulations will force them to raise prices, making it more difficult for consumers to access affordable phones. “We are solving a problem that I don’t think exists,” said Godwin Okoyo, an electronics retailer. “Most of our shops have genuine phones that meet the needs of different categories of customers.” For vendors, the cost of compliance will be significant. In addition to the $1,937 one-time fee, many vendors fear requiring them to buy from licensed distributors will increase device prices. Currently, small vendors can source phones from various unregulated suppliers at lower costs, which helps them compete in Kenya’s price-sensitive market. This move could drastically reduce competition and limit access to affordable gadgets for the general population. Kenya has a long history of struggling to enforce industry standards. As a result, many small vendors are concerned that the new regulations will not be adequately enforced, which could lead to the continued proliferation of substandard devices in the informal market.
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- February 10 2025
- BM
TechCabal Daily – Will you buy the cNGN?
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning We’re still receiving applications for features. We’re seeking deeply reported features on innovative startups, the business of tech, policymaking around innovation, and the intersection of culture and technology all across Africa. Send a pitch to kay@bigcabal.com. For more on what to include in your pitch, please check out our pitch guide. cNGN, Nigeria’s first Naira-backed stablecoin goes live Fidelity Bank raises $154.8 million CBN Postpones MPC Meeting World Wide Web 3 Events Cryptocurrency cNGN, Nigeria’s first Naira-backed stablecoin goes live Image Source: Wunmi Eunice/TechCabal. Will you buy the cNGN? The cNGN, Nigeria’s first Naira-backed stablecoin, has many use cases. The most obvious and important one is that it provides a low-cost way for remittances and cross-border transfers. Recently, there’s been a lot of hype around stablecoins, and Nigeria is one of the countries leading the charge. The launch of cNGN appears well-timed. Interest in cryptocurrency and stablecoins is growing in Nigeria, though current trading volume is primarily driven by a small group of knowledgeable traders and businesses seeking protection against foreign exchange shortages. This raises questions about adoption by average Nigerians lacking the same level of knowledge or trust in digital currencies. Factors like high inflation, currency instability, and general trust issues could hinder wider acceptance. Yet, the cNGN is an exciting prospect. Developed by the African Stablecoin Consortium (ASC)—a group of fintechs, banks, and blockchain companies—cNGN is pegged 1:1 to the Naira. Unlike the government-backed eNaira, this private-sector stablecoin aims to make the Naira more competitive in the digital asset economy, especially against popular USD-pegged stablecoins like USDT and USDC. For Nigerians, cNGN could be a game-changer. It offers cheaper transfer fees compared to USDT on Ethereum, which is a big deal for a country where remittances are a major part of the economy. Once the Naira-backed stablecoin is fully integrated on all blockchain networks, and completes rollout, it is expected to start trading on-chain. On-chain trading will open up the cNGN to list on more platforms and exchanges, giving it more use cases for Nigerians to benefit from the compliant stablecoin. For example, once Nigeria’s Securities and Exchange Commission (SEC) issues more provisional licences as part of its Accelerated Regulatory Incubation Programme (ARIP), it will empower more local and foreign exchanges to list the stablecoin. For now, it’s only available on Busha, though exchanges like Quidax might list it soon. The cNGN launch is a big step for Nigeria’s crypto space, and if it sees more utility, it could change how Nigerians move money digitally—the compliant way. Afincran Connect: A Fintech Mixer by Fincra Fincra is hosting an exclusive fintech mixer on 12th February 2025 in Nairobi, bringing together industry leaders for networking, conversations, and connections. Nairobi | 18:00 – 21:00 EAT Limited spots—RSVP now. Banking Fidelity Bank raises $154.8 million Image source: Google Fidelity Bank, a tier-2 Nigerian commercial bank with ₦6.23 trillion ($4.2 billion) in total assets, has recorded a 237.92% subscription for its recently concluded public offer, making it the fourth bank to complete a public capital raise after tier-1 banks, Access Bank, GTBank, and Zenith Bank. Following the Central Bank of Nigeria’s (CBN) announcement in March 2024 for a new recapitalisation rule for international, national, and regional banks, Fidelity Bank was the first bank to begin raising funds; it listed its share and rights offer on the Nigerian Exchange (NGX) in July 2024. The bank initially offered 10 billion ordinary shares at ₦9.75 ($0.0065) per share but received applications for 23.79 billion shares, amounting to ₦231.97 billion ($154.8 million). Following CBN’s verification, 107,588 applications were deemed valid, and Fidelity absorbed an additional 5 billion shares beyond its initial offer. Additionally, its rights issue of 3.2 billion shares at ₦9.25 per share recorded a 137.73% subscription, with all valid applications fully allotted. Shares will be credited to investors’ central securities clearing system (CSCS) accounts by February 13, 2025, while refunds for surplus applications will follow. This will allow the investors to start receiving dividends on their investments. Those who subscribed successfully can track their allotments and prepare for potential gains, while others may consider the secondary market for opportunities. As a national bank, Fidelity has reached the required ₦200 billion ($133.4 billion) capital base that was set by the CBN in 2024. The capital raise also shows strong investor confidence in the bank and its future. Additionally, the oversubscription reflects growing investor interest in the banking sector, which could shape further capital raises by other tier-2 and smaller banks. More broadly, the successful public offerings of Nigerian banks in the capital market send a strong message that the market remains a viable and effective avenue for raising capital. With the CBN’s recapitalisation deadline approaching, Fidelity’s success sets a precedent for how smaller banks can still find success on the capital market. Presently, Stanbic IBTC, another tier-2 lender, is raising money through a rights issue. Investors and industry watchers alike will be looking at how other banks respond in the coming months. How Paystack protects your business from cyber fraud Discover Paystack’s many security features and best practices for fraud prevention. Learn more→ Economy CBN Postpones MPC Meeting Image Source: CBN The Central Bank of Nigeria (CBN) has once again postponed its Monetary Policy Committee (MPC) meeting. Originally scheduled for February 17–18, the meeting has been delayed due to the unavailability of updated inflation data. Earlier this year, Nigeria revised its methodology for calculating the consumer price index (CPI) and gross domestic product (GDP). The National Bureau of Statistics (NBS)—which tracks inflation by monitoring the price changes of 740 goods and services in the CPI basket—expanded the basket to include additional items, with 2024 designated as the new benchmark year. According to the NBS, the updates were implemented to better reflect current consumption patterns. This marks the second postponement of the MPC’s first meeting in 2025. Initially set for January 27–28, the meeting was rescheduled to February 17–18 following the CPI rebasing. Analysts
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