Obtaining a fintech license in Africa is still very challenging. There is no single African fintech license. Each country has its own regulatory framework requiring separate applications.
The license application process is plagued with high capital requirements and lengthy 2-8 month approval processes. While markets like Nigeria and South Africa prove to be rigorous, others like Rwanda are faster.
Success for fintechs operating in these markets forces them to seek local partnerships. Those who can raise substantial capital and adhere to strict compliance. Those who can’t are forced to restructure or shut down altogether.
A Single License Is Not a Guarantee for Expansion
In Africa, having a license for one activity in one jurisdiction does not necessarily make it easier to apply to operate in another jurisdiction.
This is what operating in Africa looks like.
A fintech already operates in Uganda and is entering the Zimbabwean market. It applies for licensing, but because it’s operating with a new business model, it will face barriers in application or approval for one reason. Existing licensing categories do not apply to its products or services.
And even if existing licensing meets some of their needs, the Zimbabwean regulator may impose some restrictions on where the fintech can operate and who they can serve.
With such regulatory limitations, most license applications are not submitted. They are either dropped before the regulator approves or are rejected by the regulator.
Other than the rigid regulation, the cost of applying for another license, especially in smaller markets, inhibits expansion.
Regulatory Uncertainity
Even before crossing borders, payment operators struggle to navigate the complex regulatory regime in one jurisdiction.
Fintechs struggle to understand which licensing categories or regulations apply to them and which regulatory body oversees their domain.
After submitting license applications, they don’t have visibility on the status of their application. They rarely get clear communication for delays, requests for additional information, or reasons for rejection.
Even applications in the post-approval stage may still face challenges due to regulatory volatility
Skepticism on emerging technologies, including cryptocurrency and blockchain, exposes fintechs to inconsistent directives, or worse, license reversals due to policy uncertainty.
Some fintechs operating in such environments have lost licenses, changed their products or services to remain operational, or closed operations.
Comply or Withdraw
2-8 months spent to apply and wait for approval, the cost of operating a business in this period, and repetitive processes like resubmission of documents create barriers for licensing.
The high capital requirements, in-person engagements, and the requirement to have physical presence in respective jurisdictions usually leave fintechs with two options.
Comply with the challenging requirements or withdraw from the market
Limited Innovation Support
While many jurisdictions boast of innovation centers and fintech accelerators, not all are equipped to accelerate fintech licensing.
Inaccuracies or omissions that lead to not having the correct documentation for governance structure, applying for the wrong license, or a license with wrong functions cause fintechs to fall out of the application process.
In the wake of these challenges, fintechs either abandon their businesses, sell, amend their services so as not to need a license to operate, or opt to operate without one altogether.
Fintech License Passporting: The Game Changer
In 2026, the fintech regulatory landscape is changing with the adoption of fintech license passporting.
Barely a year after Rwanda signed an MOU with Ghana to implement Africa’s first fintech licensing passport, the National Bank of Rwanda and the Central Bank of Kenya announced an MOU to develop a similar framework for PSPs.
In a statement released on March 11, 2026, CBK said the MOU commits both regulators to develop a License Passporting Framework for PSPs between Kenya and Rwanda.
When implemented, payment providers in one country will easily expand into the other without going through an entirely new licensing process.
The move will
- Reduce duplicated regulatory requirements, despite meeting similar standards.
- Save time and money spent on license applications
Fintechs from either country will remain under supervision from both regulators.
CBK confirmed that this initiative aligns with the East African Community Cross-Border Payment Masterplan, which envisions a more integrated, efficient, and inclusive regional payment landscape
Lastly…
Businesses in the two countries are set to benefit from faster digital transactions, smoother remittances, and wider access to financial services across the two markets.
Are you planning to enter either of these markets?
Velex Advisory helps businesses by:
- Conducting market entry evaluation
- Developing a licensing and regulatory compliance guide
- Ensuring they adapt to new market requirements
Stay in our circles to know more about fintech licensing, passports, and other regulatory trends in Africa.
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