The Central Bank of Kenya (CBK) and the National Bank of Rwanda (NBR) have signed a new agreement aimed at making cross-border payments easier and more efficient between the two countries.
In a statement on Wednesday, March 11, CBK explained that the agreement focuses on developing a framework that will allow licensed payment companies to operate more seamlessly in both Kenya and Rwanda while maintaining regulatory oversight.
"The Central Bank of Kenya (CBK) and the National Bank of Rwanda (NBR) announce the signing of a Memorandum of Understanding (MoU). The MoU outlines the commitment and steps by the Central Banks to develop a Licence Passporting Framework for Payment Service Providers (PSPs) between the two jurisdictions," the statement read.
According to CBK, the planned framework is designed to address the difficulties payment providers face when navigating similar but separate regulatory systems in different countries.
"The Licence Passporting Framework (the Framework) will represent an important step towards addressing the challenge of duplicative regulatory processes despite substantial similarities in requirements," the statement added.
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CBK added that the new arrangement will support the expansion of licensed payment companies while ensuring that both countries maintain strong supervision of financial services.
"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 further read.
According to CBK, the initiative is also part of broader efforts by East African countries to integrate their financial systems and improve regional payment infrastructure.
"This initiative is anchored on the East Africa Community Cross-Border Payment System Masterplan (EAC Masterplan), which sets out a clear vision for a more integrated, efficient, and inclusive regional payments landscape.
"A key priority under the EAC Masterplan is the development of a mutual recognition framework for the licensing of PSPs in partner states, aimed at addressing the regulatory fragmentation that has historically limited the expansion of payment services across our borders," the statement concluded.
This comes months after CBK unveiled draft regulations targeting credit guarantee businesses, following amendments to the CBK Act under the Business Laws (Amendment) Act, 2024.
In a notice on Thursday, September 25, 2025, CBK said the move is part of efforts to strengthen regulation and supervision in the sector.
The regulator said the proposed framework will enhance transparency and ensure that only credible entities are allowed to operate under the new legal regime.
"In this regard, every entity undertaking credit guarantee business will be required to be registered to carry on and will only be licensed once minimum governance, business conduct, and prudential standards consistent with the strengthened prudential laws have been met.
"The draft regulations are intended to provide a transparent and predictable framework to ensure that only credible operators are licensed by CBK within these prescribed standards," the notice read.
According to CBK, the guidelines are designed to provide a clear framework for licensing, supervision, and governance of credit guarantee operators in the country.
"The draft Regulations cover key aspects including: licensing, governance, business management, and other operational requirements for registration, licensing, governance, business risk management, and other operational requirements for entities undertaking credit guarantee business," the notice added.
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