Through the Fintechub project in Rwanda, UNCDF in partnership with the Government of Rwanda, the ICT Chamber and Kigali Innovation City held on 12 March 2021, a discussion on how fintech startups can deal with regulatory compliance in Rwanda.

Peace M. Uwase, Executive Director of Financial Stability at the National Bank of Rwanda (BNR) was invited to the online event for a conversation on fintech regulation with fintech startups, project partners, and other key stakeholders in Rwanda’s financial and digital innovation sectors.

At the beginning, Uwase clarified that BNR did not have a dedicated regulatory framework for fintech. The current regulatory approach at BNR covers banking services, deposit taking, insurance, pensions, payment services, among others. Since most fintech startups in Rwanda are in the payment space, Uwase introduced five relevant licenses that BNR issues.

“The first one is electronic money issuers license, with minimum capital requirement of 200 million francs; the second one is license for remittance companies, with minimum capital requirement of 30 million francs; the third one is license for service providers who create platforms that enable people to pay, with minimum capital requirement of 50 million francs; the fourth one is license for payment aggregators who collect payments from people and sit with funds for several days, with minimum capital requirement of 100 million; the last one is license for issuance of payment instruments that involves check printing service, with minimum capital requirement of 100 million,” listed Uwase.

She further expounded why capital requirement was high and how startups could prepare for it. “In short, the capital requirement figure is based on BNR’s assessment of the perceived risk. There is a sense of proportionality that BNR incorporated in the capital requirements. For example, if some companies simply provide platforms without sitting with money, then the minimum capital requirement would be low. In contrast, those who collect and sit with money will face higher capital requirement because of perceived risk of potential loss of that money,” Uwase noted. As for startups’ compliance with capital requirement, Uwase clarified that there was no need for startups to raise and put money in a bank account without mobilizing money. The startups only need to demonstrate the funding that they have and assure BNR that they are able to run their business. In other words, that funding could eventually be used to invest in their business.

During the Q&A session, Uwase shared insights on challenges from a regulatory perspective, for example, with the increasing number and diverse background of service providers, financial risk remained a top concern. On the question of when startups should engage with regulators, Uwase recommended startups to reach out to regulators as early as possible since financial services are highly regulated both locally and globally.

Watch the full Rwanda Fintechub community event in the video below:

To read more about the previous community event, click here

To learn more about the Fintechub initiative, watch the video below or visit the project’s site at https://fintechub.rw/