A timeline of the recent travails of Flutterwave, ChipperCash others in Kenya

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“They are not licensed to operate and therefore they shouldn’t be operating. We can also say the same for Chipper Cash,” Njoroge said
The complete timeline of Flutterwave and ChipperCash drama with the CBK

In a new sweeping move, the Central Bank of Kenya (CBK) sent out a circular last week to all financial institutions that are in partnership with Flutterwave and ChipperCash to cease working with the fintech companies. This comes after Governor, Patrick Njoroge said during a Monetary Policy Committee (MPC) meeting that Flutterwave and ChipperCash are not licenced to operate in Kenya.

“Flutterwave is not licensed to operate as a remittance provider or for that matter as a PSB service provider in Kenya. They are not licensed to operate and therefore they shouldn’t be operating. We can also say the same for Chipper Cash,” Njoroge said at the time.

The new circular from Matu Mugo, the deputy director of bank supervision at the CBK, reads in part:

“It has come to the attention of the Central Bank of Kenya (CBK) that Flutterwave Payments Technology Limited (Flutterwave) and Chipper Technologies Kenya Limited (Chipper) have been engaging in Money Remittance and Payment Services without licensing and authorisation by CBK. You are therefore directed to immediately cease and desist from dealing with Flutterwave and Chipper.”

Kenya Central Bank Governor Patrick Njoroge SM17 Seminar: Central Bankers and Inclusive Growth Image Source: Michael Spilotro
Kenya Central Bank Governor Patrick Njoroge. Image Source: Michael Spilotro via TechCabal

The circular from the CBK immediately suspends Flutterwave’s future in the country in which it has been providing remittances since 2016. In 2018, Flutterwave launched its Barter App in Kenya.

Flutterwave released a statement last week after the CBK said that it wasn’t licenced, admitting that it indeed isn’t licenced for money remittances in Kenya. It said that it has been providing its services however through partnerships with “banks and mobile network operators licensed by the Central Bank of Kenya.”

Flutterwave also adds in its statement that: “We have been in constant engagement with the Central Bank of Kenya to ensure that we provide all the requirements and we look forward to receiving our license.”

But this is not the first time in recent months that the CBK is saying that Flutterwave is not licensed in Kenya. But this time the CBK has taken action against Flutterwave sending the cease and deceased circular to companies offering financial services in the country.

Early last month, a high court in Kenya ordered that Flutterwave’s accounts be frozen after the Asset Recovery Agency in the country accused the company of money laundering through a network of accounts. At the time the CBK had also said that Flutterwave isn’t licenced for operations in the country.

Not just about Flutterwave

It wasn’t only Flutterwave’s accounts that were frozen. A handful of other Nigerian fintech companies offering similar products as Flutterwave also had their accounts frozen including KoraPay. Speaking to Technext at the time, KoraPay said that it was in communications with the CBK and was corporating. While it denied the money laundering allegations, it admitted that it was still in the process of getting a licence.

Flutterwave didn’t admit that it wasn’t licenced for operation in Kenya. In fact, Gbenga Agboola had initially implied that all the allegations levied against it in Kenya were politically motivated.

“Why are Nigerian companies in Kenya being targeted by Kenya ARA? This is happening near their election time,” Agboola has said hours after the news of Flutterwave’s account being frozen in Kenya was broken by the Star, a Kenya news platform.

Central Bank of Kenya. Image source: Business Daily
Central Bank of Kenya. Image source: Business Daily

If Flutterwave has a license, it is indeed a victim. If it hasn’t been issued a license, then, it is in the wrong. If you don’t have a license. You don’t have it. The company then released a lengthier statement to the media, categorically calling all allegations “false claims.” It read in part:

“We are a financial technology company that maintains the highest regulatory standards in our operations. Our Anti-money laundering (AML) practices and operations are regularly audited by one of the Big four firms. We remain proactive in our engagements with regulatory bodies to continue to stay compliant. We are working to ascertain the motive behind the false claims, and have the records straightened. Through our financial institution partners, we collect and pay on behalf of merchants and corporate entities.”

Though Flutterwave did say that it was operating through its financial partners in the country, it didn’t say categorically that it wasn’t licenced in Kenya. Fintech and other financial organisations typically have partners with which they facilitate their operations. It doesn’t mean that the company isn’t licenced in the country.

For fintech companies to carry out money remittances, they typically have to meet a set of criteria stipulated by the central bank of the country before they are granted licences to operate in the country.

It is unclear if Flutterwave was trying to downplay not being licenced in Kenya. But Flutterwave downplaying it not being licenced and dismissing it as “false claims” initially, raise more concerns about the company’s reputation and more so Agboola, its CEO who was once the star of the African startup ecosystem, but has seen been the subject of a series of investigation about insider trading, impersonation and gross workplace improprieties perpetuated by him at the company.

In an interview in April, one of the co-founders of Flutterwave Iyinoluwa Aboyeji, who has since left the company, corroborated some of the claims in the investigations, including that Agboola had another identity “Greg,” who was a chief technology officer at the startup.

Gbenga Agboola
Gbenga Agboola, CEO and co-founder of Flutterwave

Flutterwave’s drama in Kenya further solidifies the new perspective of Agboola as a founder shrouded in shady machiavellian tendencies.

This could implode massive PR operations that the company has been undertaking to restore its reputation and investors’ confidence in it. Flutterwave in recent months has announced new executives from American Express and Goldman Sachs.

This also raises questions about the culture of expansion that has become part and parcel of the startup ecosystem in Africa, and whether or not it truly is a marker of growth as many African startup experts have claimed. Companies like Moove or even Kora have undertaken massive expansion of their businesses even as they struggle to fully integrate into Nigeria.

The case of ChipperCash

ChipperCash, a fierce competitor of Flutterwave that the CBK says is also not licensed for operation in Kenya is yet to release a statement.

Even though it was already providing money remittance services since 2016, according to the most recent press release Flutterwave issued last week, it wasn’t until 2019 that the company submitted an application for a Payment Service Provider license in Kenya.

“In 2019, as our operations grew, Flutterwave submitted its application for a Payment Service Provider licence. We have been in constant engagement with the Central Bank of Kenya to ensure that we provide all the requirements and we look forward to receiving our licence,”

– the statement reads in parts

Flutterwave said that it’s working with regulators on the ground in Kenya to get its license and the entire fiasco sorted.

“We are understanding and respectful of the Central Bank of Kenya’s responsibility to protect the payments ecosystem and we support the ongoing collaboration between regulators and fintechs to create an atmosphere that fosters innovation in the financial services industry,” according to the statement.

This all comes as Flutterwave’s Barter card face major setbacks that forced it to send a mail to customers last month that it was discontinuing the service which provides virtual debit cards. Flutterwave and many other fintech companies have been able to power their virtual dollar cards provided by MasterCard through a partnership with the Zambian startup Union54.

Amid mounting claims of fraudulent transactions, MasterCard and Union54 discontinued their partnership, inadvertently unending partnership with other tech companies including Flutterwave.

ChpperCash c0-founders, Maijid Moujaled and Ham Serunjogi. Image source: ChipperCash

ChipperCash which provides virtual VISA dollar cards to customers invested heavily in targeted advertising promoting its VISA cards. Now both companies are in similar hot water in Kenya.

ChipperCash is yet to release a statement about the new circular sent out by the CBK directing their partners in the county to stop working with them or on whether or not it is licenced for operation in Kenya.


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