Regulators of the mobile and financial sectors, have warned against the Parliament’s plan to split the popular mobile money transfer service; M-Pesa, from telecommunications company; Safaricom .
The Central Bank Of Kenya (CBK), Ministry of Information and Communications Technology (ICT), and the Communications Authority of Kenya (CA) on wednesday the 10th of July, asked MPs to be cautious in their efforts to separate mobile money services such as M-Pesa, Airtel Money and T-Kash from their parent mobile telecommunication companies.
The warning comes as MPs (Members Of Parliament), prepare to debate the Kenya Information Communications (Amendment) Bill of 2019.
The bill is seeking the registration of mobile money services as separate business establishments.
If the Members of Parliament succeed, the telecommunications regulator will be forced to make sure that mobile money services are licensed as banks.
The telecommunications firms will then only be licensed to only offer data, SMS and voice services.
Governor of the Central Bank of Kenya. Photo from Daily Nation.
The Governor of the Central Bank Of Kenya (CBK); Patrick Njoroge, the Ministry of Information and Communications Technology’s Principal Secretary; Jerome Ochieng and the Communications Authority of Kenya’s Director-General; Francis Wangusi, told Members of Parliament on wednesday the 10th of July, that the proposal should be properly thought through, before a decision is made.
Mr. Jerome Ochieng said in response to demands by Narok Senator; Ledama Ole Kina, that, “Our opinion is that this needs to be thought through properly and see the pros and cons of either de-linking them or making them stay together,”.
The Senator; Ole Kina asked the Ministry of Information and Communications Technology (ICT), Central Bank Of Kenya (CBK) and Communications Authority of Kenya (CA) to explain why Safaricom cannot be split, stating that money services should be treated as banking services.
Ledama Ole Kina, stated that the use of national identification cards to carry out transactions via M-Pesa, has resulted in identity theft by unscrupulous users.
The senator claimed that the use of M-Pesa has led to loss of personal data, with lost Identification Cards being used to register Sim Cards.
Mr. Jerome Ochieng however, asked Senators to look back and reflect on the origin of M-Pesa.
“Safaricom was originally telecommunications company but M-Pesa came as one of its innovations. The ICT Ministry appreciates such innovations.”
The Principal Secretary added that; “If we split M-Pesa from Safaricom, will we be encouraging innovation or stifling it?”
The Governor of the Central Bank Of Kenya (CBK); Patrick Njoroge, said there are no absolutely risks to the Kenyan economy with the current arrangement.
According to the Governor, “M-pesa or any other money in the mobile wallet does not sit in the balance sheet of the telcos. It is a separate trust that holds the money that is secure in a commercial bank,”.
Dr. Njoroge added that,“If the telco goes under or faces whatever risks, it is not significant risk in terms of financial sector operations. But there will be shocks, we can’t always eliminate these risks just like a bank going under.”
The central bank Governor also made it known that, financial services are not linked with telecommunications companies but are merely revenue sources for the companies, because they provide a service.
