Kenyan Members of Parliament have reignited discussions surrounding the Kenya Information and Communications (Amendment) Bill 2022, which seeks to separate mobile money services from telecommunications companies.
The bill, which is aimed at improving the quality of mobile money services, proposes that these services operate under licenses from the Central Bank of Kenya (CBK).
With mobile money handling transactions worth billions daily, legislators are pushing for stricter regulations.
A key provision of the bill would require separate financial accounts and reports for mobile money services, allowing for greater scrutiny and transparency in the sector.
“The amendment will further aid in control of anti-competitive practices by large industries in the sector,” the bill states.
The proposed legislation, introduced in October 2022 by Gem MP Elisha Odhiambo, will undergo further review by MPs before it is voted on.
Should it pass, the bill will proceed to the committee stage for detailed analysis of each clause.
The bill aligns with a pledge made by the Kenya Kwanza government in its 2022 election manifesto, which proposed splitting Safaricom, Kenya’s largest telco, into two entities: a mobile telecommunications institution overseen by the Communications Authority and a financial institution regulated by the CBK.
This would significantly impact Safaricom’s flagship mobile money service, M-Pesa, which holds 95% of the market.
Safaricom has voiced its opposition to the proposal, arguing that splitting its mobile money business from its telecom operations could affect its revenue and growth.
M-Pesa has been a dominant player in the market, with transactions totaling more than KSh 35 trillion in 2023, up from KSh 29.6 trillion in 2022.
If regulated by the CBK, M-Pesa could potentially transform into a digital bank, increasing competition with traditional banks and expanding its service offerings.
Safaricom has also raised concerns about the potential financial implications, including a KSh 75 billion tax liability, though discussions with the Treasury regarding a possible tax waiver are ongoing.
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