The Central Bank of Kenya (CBK) and Airtel Kenya have officially completed the separation process for Airtel Money from its parent company. Airtel Money will hence operate differently from Airtel Kenya’s core telecoms business in charge of the call, data, and SMS business.
Airtel Kenya’s separation means the fund’s transfer platform will now be known as Airtel Money Kenya Limited, while the calls and data subsidiary will be called Airtel Networks Kenya Limited.
This marked the first mobile money product that was heading in that direction, bearing in mind that other mobile money services will be split from their mother companies before the year ends or by early 2023.
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The Central Bank of Kenya has also been pushing the split agenda alongside other agencies and members of Parliament. The plan is to ideally run mobile money services as different entities that the said CBK will regulate.
Following CBK’s push for customer-centric policies in the telecommunications industry, Airtel Networks Kenya Limited (ANKL) has separated the two arms since 2019.
“The completion of this restructuring enables AMKL to ring-fence its operations and focus exclusively on its mobile money business. Significantly, this sets the foundation for AMKL to enhance governance over its mobile money business, strengthen its operations, and offer better services to its customers,” the CBK said in a statement.
This effort will facilitate the realization of the vision in the National Payments Strategy 2022 – 2025 of “a secure, fast, efficient and collaborative payments system that supports financial inclusion and innovations that benefit Kenyans.”
About Airtel Money Kenya Limited
Airtel Kenya and Airtel Money are incorporated in Kenya. They are subsidiaries of Airtel Africa, which is headquartered in Dubai. Airtel Africa runs operations in 14 African states.
Airtel Money Kenya Limited is a Private Limited Liability Company incorporated in Kenya under company registration number PVT-JZU77XQ. It is licensed and regulated by the Central Bank of Kenya and holds an Authorization to conduct or carry out the business of payments services in Kenya issued by the Central Bank of Kenya on 21st January 2022.
In June, Airtel Kenya sold 25.77 per cent of its mobile money product Airtel Money in a deal that sought to raise more cash for the company’s operations.
The sale saw four companies give Airtel Kenya $550 million after the transaction. They were Rise Fund, which invested $200 million, followed by Mastercard at $100 million. Qatar Holding LLC invested $200 million, while Chimera Investment LLC parted with $50 million to round up the stake’s purchase.
Airtel Kenya is the second largest mobile services operator in Kenya, with a 16.9 million subscriber base.
Airtel Networks Kenya Limited and Airtel Money Kenya Limited are fully owned subsidiaries of Airtel Africa plc, licensed and regulated by the Communications Authority of Kenya and the Central Bank of Kenya.
Customers continuing to use the service will automatically be seen as accepting of the change and the customer data sharing between Airtel Money and Airtel Networks.
Airtel Money as an entity enables more independence for the mobile money unit to act more independently to strengthen operations and grow its customer base.
Fintech Privacy Case In Kenya
Through the Central Bank of Kenya, the Kenyan government is on a mission to clean up the financial technology services industry to eliminate illegal operators.
Kenya’s Office of the Data Protection Commission (ODPC) reported that it received 1,030 complaints and accepted 555, of which 299 were directed against financial technology services firms that had misappropriated customers’ personal data.
The Commission, ODPC, has been directed to audit at least 40 fintech lenders for data breaches against their customers.
The 40 fintech lenders that are being investigated have not been licensed by the Central Bank of Kenya (CBK). In September, the CBK licensed only 10 digital lenders from a pool of 288 applicants who had applied for licenses in March.
The ODPC said, “This is just one among many other complaints being investigated by the Office; we want to assure the public that the complaints received will be investigated and concluded accordingly.”
Before 2021, many Fintech lenders operated in the country without licenses and regulations, which inflated unethical activities. The CBK then commenced mandating all Fintech lenders to register for new licenses. Those that didn’t meet the application requirements were banned from the industry. More than 60% of lenders are still being vetted by the CBK.
