What happened

Former Central Bank of Kenya Governor Dr. Patrick Njoroge publicly urged the country’s mobile money providers to share a share of the income generated from the trust fund that underpins their services. In an interview with Capital FM Africa, Njoroge argued that the rapid growth of mobile money has created a sizable reserve that should benefit the broader economy, not just the operators. He did not provide a specific percentage but stressed that a “fair contribution” is necessary to sustain consumer confidence and support regulatory costs. The statement has quickly become a talking point among regulators, industry players and small‑business owners who rely on mobile money for daily transactions.

Context and background

Kenya’s mobile money ecosystem, led by Safaricom’s M‑Pay, Airtel Money and Telkom Kenya’s T‑Kash, processes billions of shillings each month. The trust fund, originally established by the Central Bank, holds a reserve that guarantees the solvency of these platforms and protects users’ funds in case of operator failure. Over the past decade, the fund has accumulated substantial earnings from transaction fees, interest on deposited balances and other service charges. Njoroge, who served as CBK Governor from 2015 to 2022, has long advocated for stronger consumer safeguards and greater transparency in the sector.

The call comes at a time when the Central Bank is reviewing its regulatory framework for mobile money. Recent drafts propose tighter liquidity requirements and enhanced reporting standards, aiming to align mobile money operations with traditional banking norms. Industry groups have warned that additional cost burdens could be passed on to users, potentially eroding the affordability that made mobile money popular among low‑income Kenyans. Nonetheless, Njoroge’s suggestion taps into a broader public debate about whether the financial gains from the trust fund should be redistributed to fund public services or subsidize small enterprises.

Historically, mobile money operators have retained the full earnings from the trust fund, citing the need to cover operational risks and invest in network expansion. Critics argue that this model creates an uneven playing field, especially as new entrants struggle to meet the same capital requirements without similar revenue streams. Njoroge’s proposal, therefore, is not merely a fiscal suggestion but a call for a more equitable financial ecosystem where the benefits of digital payments are shared across society.

Compared with what is normal

Under the current regulatory regime, mobile money firms keep 100 % of the trust fund income, using it to meet liquidity buffers, invest in technology and fund customer education programmes. In contrast, traditional banks in Kenya contribute a portion of their profit to the Central Bank’s Reserve Fund, which is used for macro‑economic stability measures. The proposed shift would align mobile money operators with banking practice, creating a hybrid model where both sectors support national financial resilience.

• Current practice: full retention of trust fund earnings by mobile money firms.
• Banking norm: a share of profits is allocated to the Reserve Fund for systemic risk mitigation.
• Proposed change: mobile money firms would allocate a defined percentage of trust fund income to a public pool, similar to banking contributions.

Why it matters

For Kenyan SMEs, mobile money is often the primary channel for receiving payments, paying suppliers and managing cash flow. If operators are required to share trust fund income, the cost may be reflected in higher transaction fees or reduced promotional offers, directly affecting profit margins for small businesses. On the other hand, a shared fund could be earmarked for initiatives such as digital literacy training, lower‑cost micro‑loans or infrastructure upgrades that benefit the same SMEs. Consumers could see improved protection mechanisms, reducing the risk of losing funds in the event of an operator’s insolvency. Moreover, a transparent revenue‑sharing model could bolster confidence among foreign investors looking at Kenya’s fintech landscape.

Practical steps

• Monitor updates from the Central Bank of Kenya and the Communications Authority for any formal policy proposals.
• Review your mobile money fee schedule and assess whether upcoming changes could affect your cash‑flow projections.
• Consider diversifying payment channels to include bank transfers or digital wallets that may have different fee structures.
• Engage with industry associations to voice concerns and suggest how any shared fund could be used to support SME growth.

Beavoren Ventures offers a Financial Management & Analysis service that can help businesses assess the impact of regulatory changes on cash flow, optimise payment processes and ensure compliance with emerging guidelines.

Talk to our team at Beavoren Ventures - info@beavorenventures.co.ke - to set up your systems correctly.

Disclaimer: This article is informational and does not constitute formal tax, audit or legal advice. For guidance specific to your circumstances, please contact Beavoren Ventures.