Presentation on the Legal and Regulatory Framework: Fintechs By: - PowerPoint PPT Presentation

Presentation on the Legal and Regulatory Framework: Fintechs By: Stephen Mwaura Nduati 1

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Kenya Area: 582,650 sq km Population: 46 million GDP per Capita: USD 1409.61 Currency: Kenya Shilling Legal System: English Common Law system No. of mobile money accounts: 28 million. Mobile Phone penetration: 78% 3

What is a Payment System? ▪ A System that enables the transfer of money from one party to another “ A set of instruments, procedures and rules for the transfer of funds among system participants”. Committee of payment and settlement systems for BIS 4

PAYMENT AND SETTLEMENT SYSTEMS “Payment and settlement systems are to economic activity what roads are to traffic: necessary but typically taken for granted unless they cause an accident or bottlenecks” 64 th BIS Annual BIS Report (1994)

ELEMENTS OF FINTECH/ PAYMENT SYSTEM Network Payment arrangements Instruments Institutions providing payment services Market Conventions, Laws, Standards Contractual and Rules Arrangement

FINANCIAL INCLUSION Source: Financial Access Surveys: 2006, 2009 & 2013 ✓ An increase to 67 percent of Kenyans can access financial services . ✓ Only about 7.8 percent are served by informal financial services. ✓ A reduction to 25 percent of the population are still excluded. 7

NPS MODERNISATION FRAMEWORK (1998-2005) ENHANCEMENT TO ELECTRONIC Cheque payment systems Payment Card systems Kenswitch goes live Dec 2002 Policy and Regulation 2004 1998 1999 2000 2002 2 003 2005 2001 8

NPS MODERNISATION FRAMEWORK (2007 – 2015) Large Value Payment Systems Cheque payment systems & Launched in 2009 Policy and Regulatio n 2007 2013 2008 2009 2010 2011 2012 2014 2015

FUTURE Large Value Payment Systems Cheque paymen t systems Policy and Regulation

CURRENT POLICY FRAMEWORK FOR FINTECHS Telco E- commerce regulation EE: MOBILE PAYMENTS, FINTECHS & AML-CFT Comp- MOBILE BANKING etition Bank Agency Payment systems Bank outsourcing Enabling Environment for Mobile 11 Banking in Africa

ENABLING ENVIRONMENT

POLICY FRAMEWORK What is the role of the private sector? What is the role of the Government? What is the role of the Central Bank?

CHALLE LLENGES 1. Access 2. Risk ( Legal, Operational, Business ). 3. Regulatory and/or Stakeholder support 14

Q&A Thank You …“Asanteni” 15