-1323.png){kind=logo}
Fintech licence passporting in Africa is gaining momentum with developments like the Kenya–Rwanda agreement and AfCFTA initiatives. This article explores current frameworks, challenges, and what the future holds for cross-border fintech expansion.
Recent developments in East Africa are bringing renewed attention to a concept that could reshape how fintech companies expand across the continent: fintech licence passporting.
In March 2026, the central banks of Kenya and Rwanda signed a landmark agreement, the Kigali Declaration on Fintech License Passporting, aimed at streamlining fintech operations between the two countries. This agreement allows payment providers licensed in one jurisdiction to operate in the other without undergoing a full licensing process again. However, businesses seeking to operate under the framework will still be required to meet applicable compliance standards, including regulatory reporting obligations, consumer protection requirements, and financial integrity obligations such as anti-money laundering controls. The passporting arrangement does not remove supervisory oversight; rather, it establishes a coordinated regulatory approach that enables authorities in both jurisdictions to supervise and manage cross-border financial activity more efficiently. Modelled in part on the European Union's passporting framework, the agreement could enable fintech companies to obtain a licence in one country and expand into the other with significantly fewer regulatory barriers. For African fintechs accustomed to navigating fragmented regulatory environments, this represents a meaningful, significant and impactful shift.
The Kenya–Rwanda arrangement, however, does not stand alone. It forms part of a broader set of ongoing continental efforts aimed at making cross-border fintech expansion in Africa easier and more accessible.
Fintech licence passporting refers to a regulatory framework that allows a financial services provider authorised in one country to operate in other member countries within a specific economic or regional bloc without needing to apply for a separate full licence in each jurisdiction.
It is based on the principle of mutual recognition: if one regulator (the "home" country) deems a company safe and compliant, other regulators in the bloc (the "host" countries) will accept that authorisation.
In practice, passporting can take several forms:
Regardless of the structure adopted, the objective remains consistent: reducing the regulatory duplication that currently makes cross-border fintech expansion in Africa complex, expensive, and time-consuming.
Today, fintech companies seeking to expand across Africa face a patchwork of regulatory requirements. A company licensed in one country cannot typically operate in another without repeating the entire licensing process, often requiring local incorporation, new regulatory applications, and additional compliance reviews. This reality has shaped the expansion strategies of leading African financial institutions and fintechs. For example, Nigerian fintech company, Flutterwave, has had to establish local entities and secure regulatory approvals in countries such as Kenya, Ghana, South Africa, Uganda, Rwanda, Egypt, and Mozambique to participate in domestic payment ecosystems and offer regulated financial services. Similarly, Access Bank has expanded across the continent largely through acquisitions of local financial institutions, including banks in Kenya (Transnational Bank), South Africa (Bidvest Bank), Zambia (Cavmont Bank), Botswana (African Banking Corporation Botswana), Mozambique (African Banking Corporation Mozambique), and Angola (Finibanco Angola), among others, to satisfy country-specific licensing and market entry requirements while scaling regional operations.
The result is a system where scaling across multiple African markets can take years and require substantial capital. For many startups, this regulatory fragmentation limits growth beyond home markets. This is precisely the problem that emerging passporting initiatives aim to solve.
One of the earliest efforts to address this challenge came in February 2025, when the Bank of Ghana and the National Bank of Rwanda signed a memorandum of understanding to implement what has been described as Africa's first fintech licence passporting framework. The agreement aims to facilitate cross-border fintech operations between the two countries while also exploring payment interoperability.
The initiative is supported by the Pan-African Payment and Settlement System (PAPSS) and the Global Finance and Technology Network (GFTN), and forms part of a broader push to develop what regulators are calling Next-Generation Digital Public Infrastructure (Next-Gen DPI) for Africa.
Rwanda's central bank governor has noted that Africa already hosts one of the most dynamic digital finance ecosystems in the world, yet cross-border payments and financial services remain costly and inefficient. In practice, many intra-African transactions are still routed through correspondent banks outside the continent, often requiring settlement in foreign currencies such as the United States Dollar or Euro before funds are transferred back into African markets, introducing a myriad of "middlemen", thereby resulting in increasing transaction costs, delays, and foreign exchange risks.
The framework's objective is therefore straightforward: create systems that enable instant, low-cost, and secure cross-border financial transactions while allowing fintech companies to operate more easily across multiple markets.
Importantly, the framework is being developed as a central bank-led initiative, with other African regulators invited to participate as the model evolves.
These developments are closely aligned with the broader ambitions of the African Continental Free Trade Area (AfCFTA). The AfCFTA aims to create a single market for goods, services, and investments across the continent, an objective that requires not only trade integration but also financial infrastructure capable of supporting cross-border economic activity.
A key enabler of this vision is PAPSS, which allows cross-border payments to be settled in local currencies rather than relying on external clearing systems. Nigeria's Central Bank is one of PAPSS's major participants, alongside multiple African central banks, payment switches, and commercial banks across the continent.
In parallel, policymakers are exploring the possibility of harmonising fintech and financial services regulations across African jurisdictions. Some discussions suggest that a continent-wide fintech licensing framework could emerge over the next few years if these efforts gain traction, a development that could significantly reduce barriers to cross-border expansion for fintech firms operating on the continent.
Despite these developments, many African jurisdictions, including Nigeria, still operate under traditional licensing models. Regulated financial services in Nigeria typically require local incorporation and the acquisition of a domestic licence from the relevant authorities. Foreign fintech companies seeking market entry generally need to establish a local entity or partner with a locally licensed institution.
Although some regional models already operate in a manner comparable to fintech passporting. For example, the Central Bank of West African States (BCEAO) serves as the central bank for the West African Monetary Union (WAMU), a highly integrated monetary zone where a single currency, the CFA Franc (XOF), is used across eight sovereign nations. Within this framework, financial institutions benefit from a more harmonised regulatory environment and can, subject to applicable approvals, operate more seamlessly across member states than is typically possible in fragmented national systems. In effect, this creates a form of regional financial integration that shares similarities with fintech passporting.
At present, Nigeria does not operate a fintech passporting framework that allows firms licensed in other jurisdictions to passport their activities into the country. This reflects the cautious approach many African regulators have adopted to maintain strong oversight of financial services providers.
However, if regional harmonisation efforts under AfCFTA continue to progress, the emergence of cross-border passporting frameworks in the medium term cannot be ruled out.
Africa's exploration of passporting frameworks is frequently compared to the European Union's system, where financial institutions extend licences across member states under frameworks such as PSD2 and MiFID II.
Europe's experience, however, also highlights important cautionary lessons. While passporting provides legal rights to operate across markets, it does not guarantee operational readiness. A concentration of licences in certain regulatory hubs has prompted warnings from regulators about regulatory arbitrage, where firms choose jurisdictions with less stringent requirements in order to expand quickly across the region.
The European Banking Authority has previously flagged the risk that firms with weak anti-money laundering controls could establish themselves in permissive jurisdictions and then passport services across the bloc. The licence revocation of Lithuanian electronic money institution PAYRNET demonstrated how regulatory action in one jurisdiction can disrupt operations across multiple markets.
The core lesson for Africa is clear: passporting can reduce regulatory friction, but it also raises the stakes for supervisory coordination between regulators.
For Africa, current passporting initiatives represent a significant step toward greater financial integration and cross-border fintech growth.
The Kenya–Rwanda agreement, the Ghana–Rwanda framework, and the broader AfCFTA regulatory discussions collectively signal that regulators are beginning to recognise the need for more coordinated approaches to fintech licensing. If these initiatives succeed, they could substantially reduce barriers to expansion and unlock new opportunities for digital financial services across Africa.
That said, passporting frameworks alone will not resolve every challenge. Their long-term success will depend on how effectively regulators align their supervisory standards, enforcement mechanisms, and consumer protection rules across jurisdictions.
For now, Africa's passporting journey remains in its early stages. The frameworks are emerging, the partnerships are forming, and the technical details are still being negotiated. Whether these efforts ultimately deliver the seamless cross-border fintech ecosystem many envision will depend on how implementation unfolds in the years ahead.
And that is the development the continent will be watching closely.
