Political and Economic General Overview: Fintech in Kenya

Team Leader: Katrina Marsden

Author: Abby MacDonald

The Fintech sector is an enterprise information technology solutions and services provider that has had a significant impact in business and financial sectors in five African countries, including Kenya, since 1993.[i] Kenya is currently a very promising market for Fintech start-ups, the Central Bank of Kenya (CBK) is generally receptive to these innovations and the number of small firms seeking these services is increasing.[ii]

Kenya is a multiparty democracy which holds elections regularly, and the media and civil society are technically free to express themselves, however, political and civil liberties do remain restricted and undermined by widespread corruption, intimidation, and brutality from security and government officials.[iii]  2017 was a particularly tumultuous year for the country, the key destabilizing event being the re-election of president Uhuru Kenyatta for his second term. The election was boycotted by the main opposition candidate, and the official in charge of the vote counting system was murdered days before polls closed. Following the election, dozens of people were killed in protests, and NGOs that questioned the election process were threatened and intimidated. The Supreme Court annulled the results, and Kenyatta submitted to a rerun, in which he again won. Later in the year, legislation was passed that restricted the Supreme Court’s ability to annul election results.[iv] Since then, there has been a surprise rapprochement between Kenyatta and his opposition, Raila Odinga, which has improved political stability slightly, and this stability seems likely to continue for the rest of Kenyatta’s term.[v]

Kenyatta is making economic growth a priority in his presidency. He is working to remove obstacles to further economic improvement through his focus on the “Big Four” initiatives of universal health care, food security, affordable housing, and expansion of manufacturing.[vi] He has also emphasized his commitment to improve conditions for doing business to allow for private sector growth.[vii]

Though economic growth has been weakened by poor governance and widespread corruption despite the recent initiatives, Kenya is an economic and financial hub in Eastern Africa, which has averaged GDP growth over 5% for the past decade. There is a steadily growing entrepreneurial middle class, and economic growth is expected to remain constant.[viii] The ease of doing business in the country is also improving, moving from 136th to 80th place in the World Bank’s Ease of Doing Business rankings between 2014 and 20188 due to the implementation of many beneficial regulatory reforms.[ix] Currently, the country provides a generally stable and promising landscape for Fintech, though being aware of the present political risks is necessary.


[i] “Our Solutions and Services.” Fintech Group, www.fintech-group.com/.

[ii] Sejpal, Sonal. “International Comparative Legal Guides.” International Comparative Legal Guides , Global Legal Group, iclg.com/practice-areas/fintech-laws-and-regulations/kenya.

[iii]  “Kenya.” Freedom House, Freedom House, 15 May 2018, freedomhouse.org/report/freedom-world/2018/kenya.

[iv]  “October 2018 Country Report: Kenya.” Economist Intelligence Unit, p. 4. http://www.eiu.com/FileHandler.ashx?issue_id=327266016&mode=pdf.

[v]  “The World Factbook: KENYA.” Central Intelligence Agency, Central Intelligence Agency, 25 Oct. 2018, www.cia.gov/library/publications/the-world-factbook/geos/ke.html.

[vi] Elikana, Victoria. “Figure of the Week: New US Investments in Kenya.” Brookings, The Brookings Institution, 1 Sept. 2018, www.brookings.edu/blog/africa-in-focus/2018/09/01/figure-of-the-week-new-us-investments-in-kenya/.

[vii]  “The World Factbook: KENYA.” Central Intelligence Agency, Central Intelligence Agency, 25 Oct. 2018, www.cia.gov/library/publications/the-world-factbook/geos/ke.html.

[viii] Elikana, Victoria. “Figure of the Week: New US Investments in Kenya.” Brookings, The Brookings Institution, 1 Sept. 2018, www.brookings.edu/blog/africa-in-focus/2018/09/01/figure-of-the-week-new-us-investments-in-kenya/.

[ix]  “Doing Business 2019, Training for Reform: Economy Profile, Kenya.” World Bank Group, p. 61. http://www.doingbusiness.org/content/dam/doingBusiness/country/k/kenya/KEN.pdf.