Airtel Kenya has started its new entity operating as Airtel Money Kenya Ltd (AMKL) by separating its mobile money business from its telecommunications arm.
It was announced by the Central Bank of Kenya Tuesday morning as a “move milestone for the industry”. This operation helps AMKL to focus on its mobile money business and guarantee its operation. The financial regulator made a statement that this new entity sets the base of AMKL to lift up governance over its mobile money and brings better offers to serve its customers with better services and strengthens its operation.
The Separation of Mobile Money Transfer and Lending Unit Business
On the 21st of January, 2022, AMKL was licensed as a Payment Service Provider (PSP) by the Central Bank of Kenya with the National Payment System Act, 2011. The process of the separation of the two arms of Airtel Kenya started in 2019 alongside Safaricom, being the largest telecom in the region was also expected to do the same with the “customer-centric” policies by the CBK in the telecom industry.
In splitting Safaricom’s telecoms and business from mobile money transfer and lending unit business, Safaricom overcame regulators and parliaments for years and also declined unjust competition between Airtel and Telkom Kenya. Early last year, the parliament attempted to make the split a reality, but failed after the debate on the Kenya Information and Communication bill was snubbed which aimed at addressing the concerns of Safaricom becoming too big through its mobile data and mobile money.
Peter Ndegwa the chief executive officer of Safaricom states that the industry is in the process of splitting which will form a holding company to accommodate mobile money, connectivity, tower and Ethiopian business as their subsidiaries. However, it was noticed that it’s not only Airtel and Safaricom that demanded for the separation of their arms of businesses but Telkom Kenya also agreed with the CBK.
Payment Service Providers (PSPs) have been engaged to ensure that the activities of CBK are in close safety from other business lines. This will enable CBK to be prepared for any shocking activities by other business actions, improve resilience and focus their attention on enhancing its services to customers.
Safaricom leads in controlling 41.9 million mobile money wallet, Airtel controls 21.5 million and Telkom controls 4.6 million out of 68 million
